Portfolio Construction – June 2021
Alfred Lam, CFA, Senior Vice-President and Chief Investment Officer
Marchello Holditch, CFA, CAIA, Vice-President and Portfolio Manager CI GAM | Multi-Asset Management
Consumers have only had to look at the gas pump or local grocery store the past few weeks to notice the increase in inflation and consumer prices. It seems like everything has gone up – consider:
• The U.S. consumer price index (excluding food and fuel) jumped by the most since the 1980s.
• The Canadian inflation numbers that followed suit were comparably high.
• Resources from cars and lumber to copper and oil have gone up in price.
• Producer prices – the input costs of components for goods producers – spiked.
• Wage inflation – a leading indicator of consumer price inflation – is accelerating.
The good news is our portfolios have benefited from exposure to inflation-sensitive areas like resources and other real assets, as well as underweight exposure to fixed income. Now the big question is – will this inflation be temporary as the U.S. Federal Reserve suggests?
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