• Inflation concerns along with geopolitical tensions are contributing to shifts in portfolio allocations. Alternative funds led open-end mutual fund sales from an asset class perspective in February 2022, bringing in $3.6 billion. The best-selling categories in the  OEMF space in February were Large Blend ($6.4 billion), Bank Loan ($6.2 billion), and Diversified Emerging Markets ($2.4 billion), based on Morningstar data.
• More than three-quarters of surveyed advisors ranked inflation as a top economic concern. In response, nearly half (48%) shared that they are shifting a portion of their client’s equity allocation from growth to value. Also, 38% of advisors are boosting client allocations to energy, materials, and utilities, etc.
• Asset managers are responding to this money in motion with content attuned to advisors inflationary concerns. In early March, Van Eck and NYSE hosted the webinar “Real Inflation Risk Requires Real Assets.” Northern Trust posted a video to its website in March that features its Chief Investment Strategist Jim McDonald discussing its inflation outlook and 2021 performance, pointing out which asset classes have fared well during recent inflation, including developed market equities, natural resources, high yield, real estate, and TIPs.

Response to Inflation Concerns

Source: FUSE Research Network, WealthManagement.com