Disclaimer
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.
Investment trusts investing in real assets have provided decent capital protection in recent decades, generally generating positive total returns on a NAV basis when markets have fallen. However, the current environment is unlike anything we have seen in the recent past. High inflation looks like being persistent, while there is a risk of a period of stagflation. Having discussed the total return and income potential of alternatives in previous articles, here we consider their diversification benefits in the current environment. Specifically, we ask whether investors can expect protection to be provided by real assets in a period of high inflation. We analyse which asset classes and specific trusts look in the best position to do this.
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