ETFs provide inflation hedge for Asia investors

With inflation-linked government bond markets still in their infancy in Asia, regional investors are turning to precious metals, commodities and other real assets to protect portfolios against rising prices. Exchange-traded products are emerging as an important tool for Asian investors to access these asset classes

Although the latest round of data points to broadly lower inflation across the region’s largest economies, with Chinese CPI falling to a 20-month low of 3.2% in February, and Indian WPI down to 6.6% from 9.7% a year earlier, higher prices remain a significant concern for Asian investors.

According to Frederic Neumann, economist with HSBC in Hong Kong, while Asian inflation might be cooling off for short-term cyclical reasons, structural price pressures have been growing in the region for years