What was the best-performing asset class in 2020? US inflation-linked bonds

 If you think “tech stocks” or “bitcoin”, think again. Instead, as the Bridgewater hedge fund recently wrote to its clients, “among the more interesting and least recognised outcomes” of 2020 was that US inflation-linked bonds beat other assets by delivering a 35 per cent return, on a risk-adjusted basis, as investors hedged against inflation risks.

In recent years, most investment portfolios have been constructed on the assumption that interest rates and inflation will stay low indefinitely.

“there could be a taper tantrum”, adds Mr Dudley, referring to the 2013 market swings that occurred when Ben Bernanke, then Fed chair, gave the mildest of hints that the central bank might cut, or taper, its QE programme

Gillian Tett FT 14 January 2021

https://www.ft.com/content/d50304b4-45d3-47d8-b793-4a58a0e9fd59