NEPC’s Ross Bremen was featured in a recent Pensions and Investments article to address the potential impact of inflation. View the article on Pensions and Investments’ site here.
Addressing the potential impact of inflation is “a tricky conversation,” said Ross Bremen, a partner at Boston-based investment consulting firm NEPC LLC, citing the performance of commodities. “You don’t want sponsors making decisions based on short-term market movements.”
Among NEPC’s 142 DC clients, one-third offer a stand-alone TIPS fund and 15% offer a REIT fund. “We haven’t seen a lot of movement over time” regarding sponsors offering these funds, Mr. Bremen said.
If sponsors want to change their lineups to offer more fixed income, “TIPS is a choice,” said Mr. Bremen, adding the warning that “TIPS isn’t a magic bullet.” TIPS fund returns aren’t guaranteed and the performance can be volatile, he said.
“Equities do a pretty good job of addressing inflation” for the investment lineups of DC sponsors, Mr. Bremen added. “When they see equities’ performance over time correlated with inflation, they don’t change.”
Although sponsors have added stand-alone inflation-protection investments, participants’ response remains muted.
Click here to continue reading the full Pensions and Investments article.