OMAM's Murphy plays inflation through food retailers

Old Mutual's Simon Murphy has begun introducing food retailers into his fund, believing the sector is well positioned to benefit from food price inflation.

Recent figures from the Office for National Statistics showed a 3.4% increase in the cost of food over the last year. This looks set to continue as food prices have been hit by events such as adverse weather conditions and Russia's recent export ban on wheat. The manager of the £99m UK Select Equity fund has built a 1.8% position in Sainsbury's and a 1.7% holding in cash and carry operator Booker. "One of the themes which is starting to come through is food price inflation," he says. "Food retailers tend to perform well when there is inflation as they are able to maintain pricin...