Inflation och Investeringar med Särskilt Fokus på Realränteobligationer

Abstract

Title: Inflation and Investments, with Focus on Inflation-linked Bonds. Investors face many types of risks when allocating assets in a portfolio, e.g. volatility and inflation risk. Inflation risk will mainly affect investments in the long perspective. This thesis will examine those risks that an investor is commonly exposed to when allocating assets in a portfolio and in particular inflation-linked risk and how to eliminate it. We examine the correlation between different assets and inflation to determine the assets’ ability to hedge inflation risk. To assess the assets’ ability to hedge inflation and volatility risk we conduct portfolio optimizations, minimizing volatility with given real return targets. By analyzing the weights of the assets in the portfolio we determine the assets’ abilities to generate real return with minimum volatility. We propose a consideration for Swedish investors when allocating with respect to real returns and risk.