The truth about the NC pension fund's inflation portfolio.

A must read on how the NC Pension Fund is loading up on commodities.   These "assets" aren't investments - they are merely directional bets.  The new SB 558 would allow $6 bn of these gambles.    

Proponents of commodities argue that they are inflation hedges - that they should go up when inflation increases.   While many commodities are correlated with inflation, the risk return trade off is frequently terrible.   You are getting a bit of diversification at a big overall risk.   Top that off with high fees and they are a drag on the overall portfolio.  

Surprisingly to many - one of the best inflation hedges are common stocks - but that's a post for another day.