We permit the publication of our auditors’ report, provided the report is published in full only and is accompanied by the full financial statements to which our auditors’ report relates, and is only published on an access-controlled page on your website, to enable users to verify that an auditors’ report by independent accountants has been commissioned by the directors and issued. Such permission to publish is given by us without accepting or assuming any responsibility or liability to any third party users save where we have agreed terms with them in writing.

Our consent is given on condition that before any third party accesses our auditors’ report via the webpage they first document their agreement to the following terms of access to our report via a click-through webpage with an 'I accept' button. The terms to be included on your website are as follows:

I accept and agree for and on behalf of myself and the Trust I represent (each a "recipient") that:

  1. PricewaterhouseCoopers LLP (“PwC”) accepts no liability (including liability for negligence) to each recipient in relation to PwC’s report. The report is provided to each recipient for information purposes only. If a recipient relies on PwC’s report, it does so entirely at its own risk;
  2. No recipient will bring a claim against PwC which relates to the access to the report by a recipient;
  3. Neither PwC’s report, nor information obtained from it, may be made available to anyone else without PwC’s prior written consent, except where required by law or regulation; and
  4. PwC’s report was prepared with Hermes Property Unit Trust's interests in mind. It was not prepared with any recipient's interests in mind or for its use. PwC’s report is not a substitute for any enquiries that a recipient should make. The financial statements are as at 25 March 2017, and thus PwC’s auditors’ report is based on historical information. Any projection of such information or PwC’s opinion thereon to future periods is subject to the risk that changes may occur after the reports are issued and the description of controls may no longer accurately portray the system of internal control. For these reasons, such projection of information to future periods would be inappropriate.
  5. PwC will be entitled to the benefit of and to enforce these terms.
I accept

1. Select your country

  • United Kingdom
  • Austria
  • Australia
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Iceland
  • Ireland
  • Italy
  • Luxembourg
  • Netherlands
  • Norway
  • Singapore
  • Spain
  • Sweden
  • Switzerland
  • USA
  • Other

2. Select your investor type

  • Financial Advisor
  • Discretionary Investment Manager
  • Wealth Manager
  • Family Office
  • Institutional Investor
  • Investment Consultant
  • Charity, Foundation & Endowment Investor
  • Retail Investor
  • Press
  • None of the above

3. Accept our terms and conditions

By clicking Proceed I confirm I have read the important information and agree to the terms of use.


The Hermes Investment Management website uses cookies to remember your preferences and help us improve the site.
By proceeding, you agree to cookies being placed on your computer.
Read our privacy and cookie policy.


Home / Capabilities / Multi-Asset

Objective: aiming to provide capital growth by delivering a return in excess of UK RPI inflation

"Targeting strong real returns regardless of the economic environment, we combine dynamic asset allocation with built-in inflation protection."

Tommaso Mancuso

Head of Hermes Multi-Asset

Why Hermes Multi-Asset Inflation?

  • Inflation is core: for us, inflation is more than a performance benchmark - our entire investment process is driven by the dynamics of inflation
  • Traditional hedges can fall short: no single asset - from inflation-linked bonds to property, gold and equities - consistently protects against or outperforms inflation
  • Growth with built-in inflation protection: aiming to protect and grow capital, we use a disciplined process to identify assets that can either match or outperform the current drivers of inflation, and invest dynamically amongst the two
  • Not macro-call driven: Inflation-matching and enhancing assets are accessed through distinct but complementary techniques, providing diversification among assets and investment styles.
  • A rare outcome: MAIF has a different 'sweet spot' than its peers: it performs best in inflationary environments regardless of economic conditions, unlike growth-dependent absolute and total-return strategies

It is a dynamic multi-asset growth strategy with built-in inflation protection, consists of two types of assets, matching and enhancing:

  • Matching assets have a fundamental relationship with inflation and the ability to protect the real value of capital
  • Enhancing assets have the ability to outperform inflation and generate capital growth.

By combining these two types of assets in one portfolio, we aim to generate annualised real returns of 3% above RPI across rolling three-year periods, with a relatively low tracking error to inflation. Our asset-allocation process is driven by a systematic assessment of the relationships between the assets in the portfolio and inflation. As such, RPI is more than a performance benchmark: it drives our entire investment process, from asset selection and portfolio construction to risk management.

"We are not attempting to forecast inflation or asset class returns but to establish the relationships between them, and invest accordingly."

Tommaso Mancuso, Head of Hermes Multi-Asset

Can any asset outpace inflation?

There is a trade-off between an asset's ability to match the trajectory of inflation or beat it. We divide our universe into assets that we believe can match inflation or exceed, and invest accordingly to achieve our targeted return.

But the relationship of assets with inflation is not stable and needs continual monitoring, and we rebalance our portfolio in response.

Investment approach

We first deconstruct the UK RPI Index to identify its drivers. From a global universe of indices and assets, we identify underlying assets and risk factors with the most potential to either match or outperform current inflationary forces, and manage them in dedicated portfolios that employ distinct investment styles:

Inflation matching: We select a diverse range of assets based on the ability of their underlying risk factors to match the path of inflation. Typical examples include inflation-linked bonds, commodities, foreign currency and credit spreads.

Inflation enhancing: We select a range of assets whose underlying risk factors demonstrate strong potential to deliver inflation-beating returns. Such assets often include equities, government bonds and risk factors.

With the aim of protecting and growing capital, we manage these exposures dynamically in response to changes in inflation.

Targets cannot be guaranteed.