Look beyond traditional asset allocation for long-lasting inflation-linked returns

Supermarkets, green energy and housing

Despite the UK Consumer Price index reaching a four-decade high, the inflation peak is yet to come.

A spell of above-trend inflation lasting until mid-to-late 2023 at least - much longer than many market participants anticipate. This means investors will have to seriously rethink portfolio positioning. It is clear the elevated inflationary environment will favour a very different set of assets than those that generated strong returns in the period of low rates and low inflation witnessed over the last decade. While high growth, low profit - if any- technology stocks achieved impressive returns before inflation took hold, they are much riskier assets to hold in a higher cost of capit...