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Inflationary environment

After a long deflationary era, it's long been speculated what kind of themes would work if we ever get back into an inflationary period. Now we have a sustained inflationary period to give us our first clues.

P123 provided an aggregate series to create a custom industry universe based benchmark to compare against the S&P. The industries that have beaten the S&P the last 6 months are pretty much what you would expect in a pro inflationary environment ... ENERGY, FINANCIAL, INDUSTRIAL, MATERIALS, NONCYCLICAL. If one wanted to create an all weather portfolio that accounts for inflationary environments, you would probably want to incorporate portfolio or factors that fare particularly well in those industries. It certainly would have been much more productive inflation hedge than gold this past year. Still, even cherry picking among winning sectors, the S&P500 index remains hard to beat, particularly by any large margin, if you're selecting the best of breed in those industries.

The ones that have been hurt are also as you would expect... TECH, TELECOMM, CONSUMER SERVICES, etc. Though consumer services may be inordinately beat up because of pandemic conditions. (Which begs the question whether every inflationary environment is unique)

You can just plug in the industry here for RBICS code you want here in the UnivBRICS function....

Jan 16, 2022 6:51:35 AM       
Edit 3 times, last edit by InmanRoshi at Jan 16, 2022 8:08:24 AM