The Contrarian Investor: Should investors fear the return of inflation?

Even though I admit to being something of an investment trust enthusiast, I rarely bother to peruse the manager statements for the funds I own.

But there are exceptions to the rule, including Ruffer Investment Company. This fund is not exactly mainstream to be fair, but what is striking about the managers' latest update is the fund's positioning for inflation risk. Obviously, the Ruffer team has been worrying about the inflationary possibilities implicit in QE for many moons now, but their current market positioning is nevertheless startling; index-linked securities account for almost half the portfolio (44%). Dig into the narrative and the managers' fears are painfully obvious - excessive debt and the likelihood of the re...