Rising inflation globally is forcing asset managers to reallocate their capital into commodities and real estate, according to new research from Clearwater Analytics (CWAN).
A poll of over 100 firms representing more than USD5 trillion in AUM shows that the majority of asset managers favour commodities (58 per cent) and real estate (55 per cent) as their preferred asset classes to combat rising inflation. Interestingly, 42 per cent also see listed equities as part of their asset mix.
The research follows the US inflation report last month which showed prices rising at their fastest pace in four decades. While in the UK, prices have also risen sharply in recent months, with the rate of inflation predicted to reach around 7 per cent by spring 2022, according to the Bank of England (BofE).
The findings also show that over two thirds (68 per cent) of asset managers surveyed do not believe that inflation is transitory, a stark contrast to the wider macro-economic consensus over year ago. Naturally, fixed income is also a major focus with over half (58 per cent) of asset managers saying that they plan to reduce their allocations or risk profile as the Fed responds with future rate hikes.
