Two inflation resilient ASX 200 shares revealed: fund manager

Inflation rates in the world’s biggest economy are at 30-year highs.

| More on:
A sharp cactus beneath a deflated balloon, indicating the fight against inflation.

Image source: Getty Images

The S&P/ASX 200 Index (ASX: XJO) is down 0.4% in afternoon trade, having recovered some of its earlier, steeper losses.

The ASX 200 is following US and European share markets lower as investors fret over 2 of the biggest concerns that could impact their portfolios in 2022.

Namely the newly emerged Omicron COVID variant, and hot running inflation that looks increasingly likely to be less transient than central bankers were forecasting just a few months ago.

Keeping in line with our headline, we’ll leave COVID-19 aside and maintain the focus on the inflation issue. The issue for investors is that higher inflation could lead to higher interest rates sooner than expected, and impact the relative outlook for almost every ASX 200 share.

In the US, the inflation rate – as measured by core personal consumption expenditures – is up 4.1% year-on-year. That’s running hotter than any time in the past 30 some years.

It’s running higher Down Under as well. As the Australian Financial Review (AFR) notes, futures markets are now pricing in at least 3 interest rate hikes by the Reserve Bank of Australia (RBA) in 2022.

Two inflation resilient ASX 200 shares

Hugh Dive is the chief investment officer at Atlas Funds Management. And he’s keeping a close eye on inflation and the potential for interest rate hikes.

According to Dive (quoted by the AFR), “Rate rises will be a big thing in 2022 and following on from that, we’re definitely seeing inflation through the economy.”

As for the ASX 200 shares that are likely to outperform in a higher inflation and interest rate environment, Dive points to international toll road developer and operator Transurban Group (ASX: TCL), and global packaging giant Amcor CDI (ASX: AMC).

Among the ASX 200 shares which could struggle in this setting, he named Inghams Group Ltd (ASX: ING), the largest integrated poultry producer across Australia and New Zealand.

Dive said:

We’ll be looking at how companies can pass on those price rises. For a company like Transurban it might be easier but for a company like Ingham that’s a much harder conversation. You want things in your portfolio where you can pass those prices on like Transurban and Amcor.

How have Transurban and Amcor been performing?

Both ASX 200 shares have underperformed the benchmark in 2021.

Year-to-date the ASX 200 is up 9.9%. The Amcor share price has gained 8.6% over that same period while the Transurban share price is up 1%.

Amcor also pays a 3.9% trailing dividend yield, unfranked. Transurban pays a 2.7% trailing dividend, also unfranked.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Amcor Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Investing Strategies

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin monitoring the CBA share price today
Investing Strategies

This year will be bad. But ASX shares still the best place to be: economist

2022 is set to be a hard slog for investors. But you don't want to be anywhere else but Australian…

Read more »

Concept image of Bitcoin and hand using laptop.
Cryptocurrencies

Using Bitcoin to diversify your portfolio? Read this

Cryptos have been rising and falling largely in line with other risk assets.

Read more »

ASX share fund manager Robert Gregory
Investing Strategies

My fund just went up 51%: This is how I did it

Ask A Fund Manager: Glenmore Asset Management's Robert Gregory explains the philosophy behind his portfolio's industry-leading performance.

Read more »

red percentage sign with man looking up which represents high interest rates
Investing Strategies

Warning: 3 ASX shares under pressure from rising interest rates

There is much bargain-hunting to be done right now, but there are still some stocks that you better off waiting…

Read more »

A female athlete in green spandex leaps from one cliff edge to another representing 3 ASX shares that are destined to rise and be great
Broker Notes

3 ASX shares destined for greatness: Firetrail

Stocks themselves have no memory, so even ones that have dropped violently this year can shoot back up if the…

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated by ASX shares news articles especially one about the Bannerman Energy share price
Broker Notes

2 ASX shares that could surprise you in a year’s time

Here are a couple of stocks that have different spins on the word 'quality', both of which could serve you…

Read more »

A person holds their hands over three piggy banks, protecting and shielding their money and investments.
Investing Strategies

How is the AFIC share price performing with the ASX 200 volatility?

Is the AFIC share price seeing the same volatility as the ASX 200?

Read more »

woman meditating and keeping calm
Investing Strategies

How to deal with the current share market calamity

This poem from 112 years ago tells you how to deal with massive stock market corrections, like we're seeing at…

Read more »