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ECB Has $51 Billion Fund Questioning Future of Inflation Hedging

  • Varma CIO says investors who haven’t hedged have fared better
  • Adding risk is getting ever more expensive for pension firms
The European Central Bank's Headquarters Illuminated During Luminale Light Festival

Photographer: Martin Leissl/Bloomberg

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The European Central Bank’s latest round of easing sent a signal to institutional investors that their inflation hedges may be growing more pointless by the day.

In the northernmost corner of the euro zone, a $51 billion pension fund says ECB President Mario Draghi isn’t giving his industry much hope that things will improve.