Asset owners are well aware that inflation has an impact on performance. However, the extent of the impact and even the direction depend on several factors. Accordingly, Meketa developed a quantitative tool to assist decisionmakers in their consideration of the potential impacts of a range of inflationary scenarios upon investment portfolios. This note explores the most influential variables — from the source of inflation, whether it was anticipated, and the length of the inflationary period, among other factors — and outlines how these considerations can be expected to affect performance across asset classes.
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