CIO CORNER
Why the inflation outlook matters
In a high inflation scenario, investors will need to consider other ways to diversify their exposure to equities
THE news media is awash with concerns about inflation. Why does it matter for investors?
There are 2 main reasons: First, different inflation scenarios typically lead to very different outcomes for equity markets. Second, developed market government bonds significantly lose their status as safe-havens in a diversified investment allocation if inflation remains elevated.
Therefore, in a high inflation scenario, investors will need to consider other ways to diversify their exposure to equities, with alternatives such as gold, commodities, private credit and private real estate assets.
