Fidelity International’s Inflation Bet Pays Off as Bonds Slide

Even before the Iran war, Fidelity International portfolio manager Mike Riddell was skeptical of the view that global price pressures were subsiding. His contrarian bet — that inflation was set to rise — is now paying off handsomely.

Months ago, he bought inflation swaps in the US and UK, essentially protection against hotter-than-forecast inflation. That’s because he saw inflation as a potent risk that bond markets — and most of his peers — were underpricing even before the Iran war sent oil prices soaring past $100 a barrel. That bet has helped returns on his two Strategic Bond Funds to surpassed more than 90% of peers, data compiled by Bloomberg show.