Inflation Sensitive Assets: Instruments and Strategies

Description

The real impacts of inflation and its most extreme form hyperinflation are known only too well: they erode value, unbalance economies and destroy wealth. In the wake of the financial crisis a huge monetary overhang threatens the major developed economies. The iron laws of economics have no respect for modern semantic niceties of quantitative , credit or monetary easing: these policies all portend of inflation that must work its way out of the system. As a result markets have focused attention on assets that protect the investor from loss of purchasing power. Inflation-sensitive assets including commodities, equities, infrastructure and real estate investments, and inflation-linked securities have in fact become a new asset class. Many institutional investors controlling trillions of dollars worth of assets are allocating an increasing weight to the sector as an alternative and complement to other traditional assets. In Inflation-Sensitive Assets: Instruments and Strategies, Stefania Perrucci and Brice Benaben blend insights and experiences from market participants including investment bankers, asset and pension fund managers and central bankers to guide the reader through this emerging sector. This book, for the first time, addresses the commodities and inflation markets together, providing a holistic treatment from an inflation perspective. Inflation-Sensitive Assets: Instruments and Strategies provides the reader with a deep understanding of the drivers of inflation, the assets which can be used to hedge it and how investors can formulate strategies when managing assets and liabilities in an inflation-sensitive environment. Designed for practitioners, the book includes important academic contributions, and will be of interest to portfolio managers, risk managers, plan sponsors and researchers alike.