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By Beverly Chandler, Opalesque London:

Diversification is key for institutional investment groups that are facing potential inflation threats according to the second annual Inflation Hedging for Institutional Investors in North America report by Clear Path Analysis. The report brings together 20 U.S. and Canadian-based pension, endowment and asset management experts, who alongside their institutional investment peers, examine what a heightened inflation environment means; what can be done to limit the damaging effects on portfolios and what are optimal assets for high or negative inflation scenarios.

Their conclusion is that there is no 'silver bullet’ which will cure all the difficulties of a potential period of high inflation. The report finds that investment groups are concerned that the next 20 years will bring higher inflation and slower growth rates than the last two decades.

Clear Path says: "Increasing oil and health care prices, past weakness of the dollar and Asia exporting higher prices to the West are all contributing to inflation. Furthermore, the U.S. Department for Agriculture projects that 2012 will bring an overall food price spike of 2.5 to 3.5%. Inflation-hedging characteristics and global-listed returns equivalent to CPI plus 6.3% over 20 years champion the use of infrastructure assets. Regulation, concession agree......................

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