Investing for inflation – Equity funds

I was recently asked by a national newspaper for equity fund suggestions that may benefit from rising inflation. In March 2021 I wrote a research piece that looked at funds for the reflation trade. In that article, I defined reflation as an environment of rapidly rising bond yields, when economic growth expectations are positive. Essentially reflation is where an economy and prices recover to a previous level. Obviously, in 2021 that previous reference point was the pre-pandemic economy.

So could I not just use the reflation piece of research to answer the question? To a certain extent, the answer is yes because there are similarities between early 2021 and now. However, there are also key differences between early 2021 and the inflationary environment of 2022. For example, in March 2021 we had the fear of rising inflation but the actual rate of inflation was still well below central bank targets, especially in the UK.