Traditional asset allocation is unlikely to protect investors against a meaningful increase in inflation. Inflation-linked bond funds could be the solution, writes Nick Sudbury.
Funds and Investment Trusts
Taylor Maritime will provide exposure to a fleet of second-hand ships that are well-placed to profit from the boom in charter rates following the resumption of trade after the coronavirus pandemic.
A handful of investment trusts have recently included cryptocurrencies in their portfolios, although most remain sceptical.
ETFs have been growing in popularity in recent years and now for the first time they have been included alongside open-ended funds in the same sectors, making it easier to compare the performance.
Real Estate Investment Trusts (REITs) with retail exposure were one of the areas worst-hit by the pandemic, but with the lockdown coming to an end there are some bargains to be had.
With the market in high spirits, Filipe R. Costa suggest four ETFs for value, recovery and momentum.
The approval of the first coronavirus vaccine last November changed the investment landscape, with rising inflation expectations pushing ten-year US Treasury yields substantially higher.
It has been a tumultuous year for Temple Bar with the Covid sell-off being followed by the appointment of a new manager and the long-awaited rotation into value.
There is a growing school of thought that the combination of pent-up consumer demand and stimulus will lead to a surge in inflation, which could have a huge impact on the performance of the different asset classes.
The rotation in favour of value stocks is not just a UK or US phenomena, but applies everywhere – including Japan, where a cyclical recovery would ensure that the trend becomes firmly established.