With the current recovery in commodity prices and sterling's depreciation feeding through to higher prices, inflation is back on the agenda, says Architas senior investment manager Solomon Nevins.
Speaking in the above video, which continues Professional Adviser's Architas Advent Calendar counting down to Christmas, Nevins discusses why real assets, like many other yielding investments, are again popular with income-seeking investors.
He said: "The Bank of England expects inflation to reach 2.7% by the end of 2017 and, while it will be reluctant to raise interest rates for fear of choking off the economic recovery, it will find itself under increasing pressure to do so.
"Taking some more inflation protection looks sensible and we think real assets are a good way to achieve this. Examples include infrastructure, property and commodities - and not only do these investments have the potential to protect against inflation but they bring diversification to a portfolio."
Nevins added: "The inflation protection characteristic sets real assets apart from other income alternatives, as the cashflows they generate should keep up with inflation and, potentially, interest rates."
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