Inflation-hedging investments

Commodities and revenue-oriented equity strategies are historically the most efficient inflation hedge, compared to gold and large-cap stocks.1 The higher the inflation beta, the better the asset class performed when inflation was high.

  • Inflation beta is a metric used to evaluate an asset class’ ability to hedge inflation. It measures the change in inflation against the return of the asset class over a specific time period (1998 – 2025 in the chart above). Inflation beta is defined as the slope of the regression line between the asset’s yearly returns and year-over-year Consumer Price Index on the last day of each year (Example: For 2025, use year over year Consumer Price Index on Dec. 31, 2025) Source: Invesco and Bloomberg L.P. as of Dec. 31, 2025. Past performance is not a guarantee of future results.

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    Based on our analysis of the historical inflation betas (using data from 1998 - 2025), commodities had the highest inflation beta, making it historically the most efficient inflation hedge among the group. Value stocks were higher than large-cap stocks, making it historically a more efficient inflation hedge versus large-cap stocks. Inflation beta is a metric used to evaluate an asset class's ability to hedge inflation. It measures the change in inflation against the return of the asset class over a specific time period (i.e., it describes the return of an asset class given a 1% increase in inflation.) DBIQ OY Commodity Index – The DBIQ Optimum Yield Diversified Commodity Index is a rule-based index composed of futures contracts of the 14 most heavily-traded and important global commodities. The S&P 500® Revenue-Weighted Index is constructed using a rules-based approach that re-weights securities of the S&P 500® Index according to the revenue earned by the companies, with a maximum 5% per company weighting. The S&P 500 Index is a market-capitalization-weighted index (largest companies based on market capitalization make up the largest portion of the index) consisting of the 500 largest, most prominent, publicly-traded companies in the U.S. as determined by S&P. XAU – Gold spot price quoted in US dollars.