Inflation Hedge

An Inflation Hedge is an investment designed to maintain or increase its real value during periods of rising inflation, protecting an investor's purchasing power. Traditional inflation hedges include gold, real estate, commodities, and inflation-linked bonds such as Treasury Inflation-Protected Securities (TIPS). In the Indian context, gold has historically been a popular inflation hedge. Equities in sectors with strong pricing power—such as FMCG and energy—can also serve as partial inflation hedges, as these companies can pass rising input costs on to consumers.