The Lazard Thematic Inflation Opportunities (LTIO) fund will consist of 40-80 stocks with market capitalizations of $1 billion or more covering five to eight themes designed to capitalize on higher structural inflation,
According to the fund’s rationale, investors may not be ready for an “inflation tipping point” that comes after a 40-year long period of declining inflation.
Steve Rafford, portfolio manager of the Lazard Global Thematic Equity team, argued that the world is experiencing important demographic shifts as well as changes in economic policy that are causing structurally higher inflation that is not currently being reflected in the markets.
LTIO is available with an annual management fee of 1% and a maximum initial fee of 3%.
“Against this backdrop, there is a strong need for strategies aimed at helping clients reduce risk and take advantage of inflation’s potential investment opportunities,” said Rafford.
“LTIO can help investors target the drivers and outcomes of inflation through diversification across themes and across time horizons, as opposed to single-theme strategies.”
LTIO will offer access to topics including consumer price capture, intangibles, industrial transition, housing and finance, finite resources and energy policy.
The fund will be managed by Refford alongside John King and Nicholas Brat, and will take ESG considerations into account to maximize long-term returns and minimize risk.
Jeremy Taylor, managing director and chief executive officer of Lazard AM, explained that investors will need forward-looking solutions to navigate and take advantage of the opportunities arising from high inflation.