Which major investment firms are preparing for inflation?

BlackRock Inc., Bridgewater Associates, and Pacific Investment Management Co. are taking steps to prepare their portfolios for a potential resurgence of inflation.

What strategies are money managers using against inflation?

Some managers are building short positions in US Treasuries and gilts, while others prefer stocks over bonds or favor inflation-adjusted Treasuries for their yield buffer.

Why are inflation-adjusted Treasuries seen as a buffer?

Treasuries with an inflation adjustment baked into their yield are favored by some firms as they offer a buffer against rising prices.

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Big Money Managers Brace for Inflation Resurgence

2 Feb

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Summary

Major firms are positioning portfolios for renewed inflation.
Some funds are building short positions in US Treasuries and gilts.
Inflation-adjusted Treasuries are favored by some for their yield buffer.

Big Money Managers Brace for Inflation Resurgence

Prominent money managers are reinforcing their investment portfolios in anticipation of a renewed inflationary period. Firms like BlackRock Inc., Bridgewater Associates, and Pacific Investment Management Co. are taking proactive steps to address potential economic shifts.

BlackRock's funds, for instance, are establishing short positions in US Treasuries and gilts, hedging against the possibility that interest rates may not decline as expected. This strategy reflects a cautious outlook on future rate movements.

Bridgewater Associates is reportedly favoring an allocation towards stocks rather than bonds in its investment strategy. Meanwhile, Pimco is highlighting the advantages of Treasuries that incorporate inflation adjustments into their yields, seeing them as a valuable hedge against rising prices.

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