This paper has been updated since it was originally published in March 2021.
With inflation on the rise, investors may wish to opt for non-traditional inflation hedges like high yield bonds and leveraged loans which generally offer lower to little duration risk, respectively, and a low correlation to investment grade bonds. High yield bonds and leveraged loans can offer additional benefits, including enhanced diversification, relatively attractive yields, lower volatility than equities, and the potential to generate strong risk-adjusted returns.