The PDF version of the October issue of ETFInvestor is now available for download.

If the link above doesn’t work, you can download this month's issue by copying this address into your browser: http://etf.morningstar.com/Newsletter.aspx?download=currentIssue

The October issue explores the impact of inflation on stocks and bonds and the efficacy of inflation hedges. While central banks around the world have been pumping money into the market, inflation in the U.S. has remained remarkably low since the global financial crisis. It’s possible that the U.S. might be following in Japan's footsteps, where inflation has been stubbornly low since the early 1990s, despite the central bank's best efforts. However, the Fed is trying to avoid that outcome and raise inflation expectations with its new "average inflation targeting policy," where it will allow inflation to run above its 2% target following periods when it has been below that threshold (as it has for much of the past decade). 

It's hard to know what inflation will look like in the future, but the best time to take stock of inflation risk is before it becomes a problem.   

As this issue explains, inflation risk is tough to hedge perfectly, especially in the short term. However, inflation only tends to be a significant problem over the long run. Over those horizons, traditional stock and bond index funds will probably grow and preserve purchasing power better than instruments commonly used as inflation hedges.       

Here, you’ll also find content about:     

• The indirect link between ESG and quality 
• SPDR Gold MiniShares GLDM and Schwab U.S. TIPS ETF SCHP
• The trade-offs of different TIPS options 
• The impact of U.S. inflation on foreign stocks

Best,

Alex