Real assets: options to protect your portfolio from inflation

Important information: The value of investments and the income from them can go down as well as up, so you may get back less than you invest.

Oil prices have come down significantly in the last few weeks, but even if the peace deal in the Middle East holds, there is no guarantee that inflation will return to the Bank of England’s 2% target. The problem is that, after almost four months of elevated energy prices, there could be "second-round" effects already in the pipeline.

The challenge with high inflation is that it erodes the real value of many financial assets, but there are steps that investors can take to help protect their portfolios. Chief among them is to include a diversified basket of tangible assets, where valuations are linked to commodity prices, regulated tariffs, or long-term contracts with inflation escalators.

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Gold

For many people, the first port of call is gold, which acts as a store of value because its finite supply prevents it from being debased in the same way as fiat currencies. Historic data suggests that the precious metal can act as a long-term hedge against inflation, although it is less effective over shorter time periods.

For customers of Fidelity Personal Investing, one of the most popular ways to gain exposure is through the iShares Physical Gold ETC, which was among the ten best-selling ETFs in the first quarter of 2026 and is a member of the Select 50 list of handpicked funds. It has a low ongoing charge of 0.12% and aims to track the daily movement in the price of gold by investing in bullion that is held securely in JPMorgan’s London vaults.

• Read: Gold: two charts that tell very different stories

Gold miners

Another option is to invest in a fund that specialises in gold mining stocks, such as Ninety One Global Gold, which features in the Select 50. This currently holds a portfolio of 38 companies, located mainly in Canada, Australia and the US, and has an ongoing charge of 0.87%.¹

When the price of gold rises, these types of businesses generally benefit as their profits increase, although there are plenty of other factors that come into the equation. It is also important to bear in mind that the mining stocks tend to be the more volatile of the two.

• Read: What is the best way to invest in gold - ETFs or gold miners?

A broader exposure to resources stocks

Gold is not the only commodity that tends to perform well during periods of inflation, which probably explains why BlackRock World Mining was among the ten best-selling investment trusts in May. It holds a diversified portfolio of mining and metals assets worldwide, with gold currently representing around a third of the underlying exposure, followed by copper, a key resource in the energy transition and the build-out of AI infrastructure.²

The trust is actively managed, allowing the underlying allocation to be adjusted whenever opportunities arise. Another attractive feature is that it pays a dividend, which can be high at times, although the ongoing charge is more expensive at 1.05%.³ Please not this dividend will fluctuate and is not guaranteed.

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Infrastructure stocks

A fourth area to consider is infrastructure, where the cash flows and asset values often have direct or indirect links to inflation. Regulated utilities provide a good example, as inflation is typically factored in when determining the prices they are permitted to charge customers.

One fund that invests in this sector is the Select 50 member First Sentier Global Listed Infrastructure, which holds a 42-stock portfolio spanning utilities, railways, oil & gas storage, and airport services, among others. It has an historic yield of 2.5%, although this is not guaranteed, and an ongoing charge of 0.88%.⁴

Infrastructure investment trusts

Arguably, the least volatile option and the one that might appeal more to income seekers, is an infrastructure investment trust such as International Public Partnerships. This member of the Select 50 holds a diversified portfolio of essential assets that can provide stable, long-term, inflation-linked returns to support a growing stream of dividends alongside the potential for capital appreciation.⁵

The Board has recently reaffirmed its 2026 dividend target of 8.79p and declared a 2027 target of 9.01p, which based on the current share price of 136p represents a prospective yield for the current year of 6.5%, although this is not guaranteed. The ongoing charge is 1.09%.⁶

• Read: International Public Partnerships: latest update

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Source:

¹ Ninety One Global Gold fund, factsheet, 30.4.26
^2,3 BlackRock World Mining Trust, factsheet, 30.4.26
⁴ First Sentier Global Listed Infrastructure fund, factsheet, 30.4.26
^5,6 International Public Partnerships, annual accounts to 31 December 2025