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Saturday, May 25, 2024

Battling inflation: Investing perspectives

09.07.2022

Asset managers share insights on managing inflation risk in retirement savings plan

In June, inflation hit a 40-year high of 9.1%.1 As consumers and companies confront higher costs and the U.S. Federal Reserve raises rates to slow inflation, inflation is driving outcomes across investment markets and forcing many savers to question their retirement plans.

Understanding how inflation impacts both asset classes and strategies to manage risk can help plan sponsors reevaluate their retirement plan menu and help participants make more educated investment decisions.

Portfolio management insights

Empower brought together four asset managers to share their insights on investment strategy in an inflationary environment. American Funds, State Street Global Advisors, Franklin Templeton and Putnam Investments explain which investments may offer inflation protection and how to construct portfolios in this environment.

While there is crossover when it comes to their strategic approaches to managing inflation, the managers also share unique portfolio management philosophies, which may differ from their peers. These shared and differing perspectives can serve as considerations to further explore when evaluating manager strategies.

The asset manager insights cover:

  • Target date fund considerations.
  • Fixed-income perspectives.
  • Alternative investment perspectives.

Setting a path

It has been decades since investors faced today’s mix of high inflation, rising rates and a potentially slowing economy. Plan sponsors can expect participants to raise concerns about inflation. Understanding the strategies and trade-offs managers use to manage inflation is a key step. With everything from investment selection to portfolio construction, it is important to review plan lineups in light of changing market conditions.

Download the white paper to hear from the featured asset managers how distinct asset classes perform during inflationary periods and how they approach managing inflationary risk.

Empower Institute - battling inflation whitepaper thumbnail

 

 

 

 

 

 

Empower Retirement, LLC jointly created the white paper with American Funds, State Street Global Advisors, Franklin Templeton and Putnam Investments as part of the Empower Fund Partner Program. With the exception of Putnam, the fund companies listed are not affiliated with Empower and its affiliates. 

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1 Bureau of Labor Statistics, "Consumer prices up 9.1 percent over the year ended June 2022," July 18, 2022, bls.gov/opub/ted/2022/consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-increase-in-40-years.htm.