As with any investment, your capital is at risk and any income is not guaranteed.

Key points

  • The Monthly Income Fund is designed to navigate this environment, including assets with cash flows contractually linked to inflation
  • The forces that gave us a decade of stable inflation have gone into reverse, and supply shocks are becoming more frequent
  • Supply shocks force central banks to choose between growth and inflation, so inflation will be tolerated for longer and will be more volatile

Your weekly food shop tells the story of inflation better than any economist. Today, the same trolley of groceries costs about 30 percent more than it did in 2021. And each price rise along the way arrived without much warning.

Yet before the pandemic, a decade of low and stable inflation convinced many investors that it was a solved problem, tamed by central banks and safe to ignore when building portfolios. This assumption has since been shattered. The world that produced that stability is gone. What replaces it is likely to bring inflation that is higher on average and, more importantly, far less predictable.

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