One of the key issues facing investors today is inflation — but plan sponsors are still divided on how much of a risk is really is. Back in the early 2000s, it seemed as though inflation would never again be a risk as central banks and policymakers adhered to strict targets. However, as this article in Institutional Investor points out, the economic slump has created a disconnect between inflation targets and consumer prices, which continue to rise.
If central banks can’t keep inflation in check — and it looks like they are having some real trouble — then pension funds are going to have to adopt investment strategies to deal with it. Whether or not you think plan sponsors need to deal with inflation risk, the article is still a good read. And stay tuned — we’ll soon have coverage of our special panel discussion on inflation from our upcoming Investment Innovation Conference. Click the link to find out more.