UPGD - Did Real Assets Provide An Inflation Hedge When Investors Needed It Most?

2025-02-07 03:55:00 ET

Summary

• We own real assets for their diversification benefits generally, and for their inflation-hedging properties specifically.
• In this blog, I review the performance of three indexes representative of asset classes that an allocator might include in a real asset bucket.
• Real assets respond slightly better to headline shocks than to underlying inflation - the coefficients for real assets variables are generally higher than those for the broad equity market.

We own real assets for their diversification benefits generally, and for their inflation-hedging properties specifically.

Real assets' first test in modern times started in 2021, when inflation climbed to levels not seen in more than a generation, taking more than two years to subside....

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