BNY Mellon Asset Management today launched an institutional strategy that manages inflationary risk by seeking long-term returns of five percentage points above the U.S. consumer price index.
The strategy, managed by four BNY Mellon investment boutiques, could prove less correlated to major equity and bond asset classes than other inflation-hedge offerings, Jeffrey B. Saef, director, multistrategy investment solutions, for BNY Mellon Asset Management, said in an interview.
A quarter of the portfolio will be invested in global inflation-protected securities, including TIPS, by Standish Mellon Asset Management; 35% in a commodity alpha long-bias strategy managed by Mellon Capital Management; 30% with Boston Co. Asset Management in global natural-resource company stock; 5% in emerging markets equities, also with Boston Co. Asset; and 5% in global real estate securities by Urdang Securities Management.
Mr. Saef said BNY Mellon has offered customized portfolios managed by multiple boutiques to some of its biggest clients, but the current strategy will be offered more broadly, with a $5 million minimum investment targeting small and midsize institutional investors.
