Important changes taking place in asset allocation to combat inflation. Institutional investors and asset managers are indeed planning to invest in strategies that provide hedging and protection against rising inflation. The reports it new research by Tabula, a European provider of bond ETFs, who surveyed 100 asset managers and institutional investors from the UK, France, Germany, Italy and Switzerland, who collectively manage nearly $ 100 billion in assets under management.
Tabula’s study shows that 95% of the wealth managers and institutional investors surveyed are already investing in products that provide certain hedging and protection against inflation. Nine out of ten (90%) plan to make changes to their asset allocation to increase inflation protection. The research results show that seven out of ten respondents plan to increase their allocation to inflation-linked bond ETPs and eight out of ten to inflation-linked bonds (36% will strongly increase their allocation).
“The world has experienced 30 years of stable inflation, mainly due to the deflationary effect of China and other emerging countries such as Vietnam and Indonesia entering the global labor market. However, we are starting to see a turnaround. This, combined with a shift towards autarchy as nations become more and more autonomy oriented, is leading some to suggest that the current inflation trend may persist over the medium to long term, ”he said. Tabula CEO Michael John Lytle. “Professional investors have acknowledged this and are taking action to provide their portfolios with some inflation protection.”
An ETF to focus on US inflation
Tabula’s US Enhanced Inflation UCITS ETF is the only existing ETF that provides exposure to both expected and realized US inflation in a single ETF. It does this by combining exposure to a US TIPS portfolio withexposure to US inflation expectations (breakeven at 10 years). Tabula reports that the ETF, with around $ 100 million in assets under management, is attracting growing interest from institutional investors and wealth managers across Europe. The fund is listed on the main European stock exchanges.
When it comes to ETFs that combine exposure to a broad portfolio of bonds linked to US inflation (TIPS) and also acting as an efficient tool for capturing US inflation expectations, 47% of professional investors surveyed said such products are “very attractive in the current environment, and 51% described them as” quite attractive “.