Investors buy ETFs to hedge inflation

Investors looking for an inflation hedge have contributed to big asset gains for exchange-traded products (ETPs) offering access to floating-rate debt, TIPS and gold in the first quarter of this year. Commodity funds in general have won versus the major asset classes, with ETFS Wheat growing by $43m in March, the highest such figure since May 2008, and ETFS Physical Silver hitting record holdings. We expect commodity ETPs to continue to see inflows, although oil funds are now suffering redemptions. Among institutional investors meanwhile there is a strong desire for yield, resulting i...