From reflation to inflation: What's the tipping point for portfolios?

June 6, 2018


Part of Vanguard's Global Macro Matters research series

Understanding the current—and potentially future—state of the global economy helps investors put market movements into context. To promote that understanding, researchers from Vanguard Investment Strategy Group examine the economic trends that affect the investing environment in this series. Below are their latest insights into Global Macro Matters.

From reflation to inflation: What's the tipping point for portfolios?

There are many options for hedging against inflation risk in a rising-inflation scenario. But risk-return trade-offs must be considered when adding inflation-sensitive assets to a portfolio.

This paper quantifies the potential benefits of these strategies and examines the significant potential risks if higher-than-expected inflation does not materialize.

Use this research to:

  • Analyze Vanguard’s outlook for inflation.
  • Examine potential investment strategies for a reflationary environment.
  • Understand the risk-return trade-offs you must consider when attempting to hedge against or capitalize on cyclical rising inflation.


  • All investments are subject to risk, including possible loss of principal.


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