Long term investors unprepared for inflation – Momentum Global White Paper
A White Paper published by Momentum Global Investment Management suggests that a lack of awareness of the risks posed by inflation to long term investments could have a severe impact on the real value of tomorrow’s pensions and investments.
The research finds that in the UK, the number of investors using cash has grown. However, while offering lower volatility in the current investment climate, cash puts investors at particular risk of the effects of inflation.
James Klempster, portfolio manager of Momentum’s Factor Series Fund range, said: “While inflation has been a ubiquitous feature of the UK’s investment landscape, rarely has it been so significantly greater than the yield available from cash or safe haven government bonds. As a result, today’s investors must look to combine asset classes that, in aggregate provide a total return that delivers real returns over inflation with appropriate levels of risk.”
“While Momentum believes that valuation remains the single most important driver of returns over the long term, different inflationary regimes have markedly diverse effects on asset classes. Therefore the need for active asset allocation is even greater if investors are concerned about inflation.”
To read the White Paper click here: [asset_library_tag 6318,Inflation: The Sleeping Giant]