Portfolios for the High Seas - Thematic July 2020

Inflation operates in regimes. Today, inflation is in the process of shifting from the “Lake Regime” to the “Ocean Regime”. In the Lake Regime conditions for inflation are generally calm and benign, and inflation is easy to keep under control. In the Ocean Regime, conditions can change rapidly and become very turbulent. Lake-going vessels are not suitable for ocean travel, and similarly many portfolios are not prepared for a potentially more inflationary environment.