How ETF investors can protect themselves from inflation

Many savers worry about rising inflation. Special index funds can protect against inflation. And there is another way to secure your own depot.

Currencies lose purchasing power due to inflation, so the savings must be invested in securities or real assets.

Aborrowings haven’t made the headlines for a long time. The times of the euro crisis are history, instead stock exchange prices at record levels and digital currencies such as Bitcoin fascinate investors. It is all the more remarkable that, according to data from the Blackrock fund company, a new bond record was reported in May. And one of a special kind: In May alone, investors worldwide invested $ 4.4 billion in index funds (ETFs) that track the performance of bonds with inflation protection. In the course of this year, more than $ 17 billion has flowed into such funds, an unusually large number. Heike Fürpaß-Peter, Germany boss of the ETF provider Lyxor, confirms: “The demand for such funds is currently very high.”

It is remarkable. On the one hand, so-called inflation-linked bonds, known in the community as linkers (because of the English “inflation-linked bonds”), are not exactly easy-to-understand financial products – all the more so in combination with ETFs. And on the other hand, even those who are just starting out on the stock exchange know by now that in times of negative interest rates, almost nothing can be earned on bonds.