Chart: Inflation hedges can introduce volatility

[ "Blog: Latest Insights" ]
[ ]
[ "Columbia Threadneedle Investments" ]
  • Chart on the Go

Download PDF

Investors may be thinking about adding inflation hedges. Our latest chart shows that these can introduce volatility as well.

 

  • Investors may be concerned about how to protect their portfolios from the impact of higher inflation.

 

  • Investments such as commodities, real estate and equities have historically outperformed when prices rise. But performance doesn’t tell the whole story. These asset classes are also characterized by higher volatility, exposing a portfolio to a greater loss if the markets turn negative.

 

  • Calibrating a portfolio for inflation can be complicated — especially in a year when the Fed is experimenting with a new response mechanism to higher prices and growth. An actively managed fund or ETF can help investors balance both volatility and return across inflation environments.

 

Download as a client-approved PDF