Asset allocators join rush to add inflation protection

A rise in inflation expectations is prompting more fund managers to seek ways to protect their portfolios, despite headline price indices sitting at ultra-low levels.

Although the UK saw inflation turn negative in April, recent data in other major markets has proved more positive. Eurozone inflation rose from zero in April to 0.3% in May, according to figures released last week. Latest US inflation figures show the headline rate remains negative, but core inflation's April rise - from 1.5% to 1.8% - was the largest in almost four years. Baring's director of asset allocation research Christopher Mahon (pictured) said investors are too relaxed about inflation, particularly in the US. "The economy is recovering but the market is a little too compla...