Profiles and Analysis
In this section…
Special report
REAL ASSETS AS
INFLATION HEDGE 21-27
“Investment is all about
anticipating things before they
happen and rising inflation is a
matter of 12 months away, so
what can investors do today,
for inflation tomorrow?” While
consensus suggests that inflation
is set to return but not for another
12 months investors are still
worried about how it will affect their
portfolios today
Manager profile
ANTHONY BOLTON 33-36
“Some people have said that
I looked at all the emerging
markets, saw China as the
best so chose China. It wasn’t
like that at all” On the eve of
relocating to Hong Kong, Anthony
Bolton talks about his plans for his
new fund launch as well as who his
eventual successor might be
Viewpoint
ASSET MANAGER
CONSOLIDATION 29-31
“The case for greater
consolidation rests mainly
on the vast number of funds
available to investors in the UK
and Europe generally” There
is considerable M&A activity
surrounding various fund houses
right now, with groups and the
volume of funds coming under
threat
The shadow of inflation
It comes to something when investors are worried about
inflation reaching the dizzy heights of 3.5% when doubledigit
inflation is not such a distant memory for some.
But investors are still worried so it is beholden on their
portfolio managers to look at either taking advantage
of this increase or protecting against further increases,
particularly when this starts to eat into capital.
Real assets are apparently the answer, in the form
largely of gold, real estate and commodities with equities
thrown in for good measure. Each of these has various
roles as part of an investment mix, only one of which is a
potential inflation hedge so it is not that easy to make the
link between money supply, rising inflation and then real
assets as a hedge against it.
■ The Bank of England’s consumer price inflation (CPI)
target is 2%, with a rate of 1% either side triggering a
letter of explanation from the Bank to the government.
■ The current CPI rate is 3.5%, up from 1.9% in
November and 2.9% in December.
■ The retail price inflation (RPI) rate, that includes
housing costs, ended November at 0.3%, stood at 2.4%
in December and was 3.7% in January.
Source: Bank of England
20 PORTFOLIO ADVISER [www.portfolio-adviser.com] MARCH 2010
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