As we head into the summer investors’ most common concern is the outlook for inflation. The unprecedented release of pent-up demand emerging from the pandemic, alongside ongoing fiscal and monetary support, is crashing into a supply chain facing ongoing disruption. The US Consumer Price Index (CPI) hit 5% in May, the highest level since 2008, and UK inflation has also risen above the Bank of England’s 2% target.
Whether or not these conditions prove temporary (as central bankers hope) is uncertain, but identifying businesses well-placed to benefit from rising prices should be on the agenda of all investors. To find them, we have focused on backing market leaders enjoying pricing power and the ability to recover rising input costs. We have also sought out businesses that have invested well – especially where the capital required for growth has already been spent.
Printing profits
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