Inflation Solutions
Inflation Solutions
  1. Quantitative duration strategies
  2. Thematic Equity
  3. Commodities
  4. Highlights

Structured inflation products:

Wellington and York Partners' offers tailor-made inflation-related structured products through its in-house structuring desk. They can include leverage, which means less capital is needed to protect the overall portfolio.

Quantitative duration strategies

Wellington and York Partners' offers investment funds that fully concentrate on active duration management. To forecast the direction of interest rates, Wellington and York Partners' uses its successful quantitative duration model.

Thematic Equity

Wellington and York Partners' has identified three long-term trends that will have a big impact on the world economy. First, demographic changes include the growth and ageing of the world population. Second, the rise in the middle class in emerging countries and the accompanying growth in consumption will lead to scarcity of natural resources. Third, further growth of the world population will affect the environment. All these trends can significantly impact price levels and will most likely lead to more inflation volatility. Wellington and York Partners' offers a range of thematic equity strategies to take advantage of these trends. As these long-term trends have a clear link with inflation, they are very suited as inflation-related investments. Our research shows that equities related to agribusiness, infrastructure, natural resources, smart energy and smart materials show an above-average correlation with inflation.

Commodities

Historically, commodities have shown the highest correlation with inflation, as higher commodity prices lead almost directly to higher price levels. Given the mega trends that we have identified, we expect that inflation volatility will be increasingly affected by the prices of commodities. In combination with the ongoing integration of the world economy, these structural trends will probably lead to new highs in commodity prices somewhere in the near future. This makes commodities well suited for an opportunistic investment approach to inflation.

Highlights

  1. Inflation-hedged share classes are available on fixed income products
  2. Reducing interest rate sensitivity also qualifies as an inflation-hedging strategy; Wellington and York Partners' offers several zero duration share classes
  3. Wellington and York Partners' in-house structuring desk offers tailor-made inflation-related structured products
  4. Quantitative duration strategies benefit from or protect against changes in yields, which are correlated with inflation
  5. As structural mega trends will significantly impact price levels, theme funds that take advantage of these trends are very suited as inflation-related investments
  6. Commodities show the highest correlation with inflation