Inflation Believers Win Big and Defy the Pandemic Market Panic

Mark Nash snapped up inflation-protected bonds in March, when markets were shaken by fears of recession and deflation that left the securities dirt cheap. Now he and other contrarians are reaping the benefits of record gains in the bonds.

Inflation-linked bonds beat nominal peers by the most in at least 22 years last quarter, despite the lack of an acceleration in consumer prices. The performance is owed mainly to investors seeking protection from price pressures that may emerge from stimulus efforts and a return to economic growth. While not all fund managers agree, Nash, head of fixed income at Merian Global Investors, thinks the market will gain further as governments and central banks prop up economies and prevent deflation.