Pioneer Investments has launched a Global Inflation-Linked Short-Term strategy, which aims to offer inflation protection through the use of low duration global inflation-linked bonds.
The firm states it launched the strategy as it feels unexpected inflationary episodes currently pose a serious threat to investors, potentially altering the risk characteristics of their investment portfolios and reducing purchasing power.
To reduce volatility and achieve a precise exposure to inflation, the strategy hedges non-euro exposure, although it offers currency hedged share classes in all major currencies.
Cosimo Marasciulo, head of European government bonds, and Semin Soher, senior portfolio manager, will manage the strategy.
Marasciulo said current market conditions, with inflation not yet an issue in many markets, meant inflation protection was still relatively cheap. The global approach of the strategy could also, he stated, reduce country-specific risks and enhance real returns leveraging on divergent inflation, real yields and monetary policy expectations.
Investing in shorter duration inflation-linked bonds that closely track inflation may provide further protection, as they display less interest rate risk than longer duration bonds.
Pioneer Investments manages assets of around €225.7 billion as of August 31 this year.
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