As its name implies, our Inflation Beaters screen is nominally focused on stocks whose earnings – and by extension, share prices – have a chance of beating ordinary price inflation.
Given retail prices have climbed by 65 per cent since the screen was devised at the beginning of 2012, this might not sound like a high bar. While inflation compounded at a not-insignificant 4 per cent a year during this time – well above the average returns on cash over 13 years – equity investors ordinarily look for much better results from the stock market.
Indeed, the FTSE 350, which serves as the screen’s benchmark and the index from which its selections are drawn, has unthinkingly delivered close to 7 per cent over the same period.