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Business News of Monday, 5 September 2022


Pension managers expect higher inflation, hedge risk

Inflation Inflation

In a new research report, 83 percent of pension fund managers surveyed in June 2022 expect inflation to increase over the next 12 months. The independent research company PureProfile interviewed 201 pension fund managers responsible for a collective $1.946 trillion assets under management based in the US, UK, Australia, Canada, the Netherlands, Switzerland, Denmark, Finland, Norway, and Sweden, using an online methodology.

Almost six in ten (57 percent) pension fund managers are predicting further dramatic increases in inflation over the next 12 months. A further quarter (26 percent) predict a slight increase over the next 12 months.

The fund managers said they have already taken steps to protect their pension schemes against inflation by “switching” allocations to specific asset classes including commodities, inflation-linked bonds, and infrastructure. About half of them said they will further increase allocation to commodities and real estate investment trusts (REITs) over the next 12 months.

US inflation slowed to 8.5 percent in July 2022 from over 40-year high of 9.1 percent in June. European Union annual inflation was 9.8 percent in July, up from 9.6 percent in June. Annual inflation rate in the UK also increased, from 9.4 percent in June to 10.1 percent in July.