Sarah Godfrey: Inflation busters in the spotlight

At least 2.5% per annum

clock • 4 min read
Sarah Godfrey is a director at Edison Investment Research

Sarah Godfrey is a director at Edison Investment Research

Inflation is currently among the hottest of topics (occasionally even overtaking Downing Street parties as the lead news item), and in light of this, the Association of Investment Companies (AIC) has produced some interesting research on the investment companies that have produced inflation-busting share price returns and dividend growth over the past five years.

However, with CPI inflation over the period under consideration having been just 2.5% per annum, past performance in this case may be scant guide to the future, given UK CPI was 5.4% in January and the Bank of England has said it could reach 7% by April, as fuel costs soar and Brexit- and Covid-related supply chain issues continue to bite. In light of the current much higher inflationary pressure, we have taken the AIC's original list of 36 investment companies and reframed it to see which funds would have beaten the much more challenging target of 7% per annum over five years. The answe...

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