These ASX 200 shares can beat inflation: expert

These shares have been named as potential inflation-beaters…

A man with a wry smile on his face is shown close up behind ascending piles of coins as he places another coin on top of the tallest stack representing rising dividends

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Reserve Bank has warned inflation is running hotter than it predicted
  • One investing expert says it's possible to position an ASX share portfolio to beat inflation
  • He advises going for larger, higher-quality companies and names his top picks

With a new year, the ASX now seems to be in the grip of some new fears. As most investors would be aware, 2022 hasn't been the easiest start to the year. As it stands today, the ASX 200 remains down more than 6.3% in 2022 so far. Why such a disappointing beginning to the year? Inflation concerns have arguably stoked many of the uncertainties we've seen across investing markets recently.

Inflation has indeed been on the rise. Just last week, we heard from the Reserve Bank of Australia (RBA) which told the public that inflation was running hotter than it predicted just a few months ago. Seeing as inflation can erode the wealth of all investors, this has understandably prompted some concerns.

So how does one position an ASX share portfolio to beat inflation? Let's check out the ideas of one investing expert.

Jason Beddow is the managing director of listed investment company (LIC) Argo Investments Limited (ASX: ARG). According to reporting in the Australian Financial Review (AFR) this week, he recently gave an interview discussing the current inflationary environment. Mr Beddow reckons the gains we have seen over the ASX the past 18 months or so are unlikely to be repeated. That's given the "extreme stimulus" in response to the COVID-19 pandemic is winding up.

ASX expert picks shares to beat inflation

As such, Beddow says that Argo is "moving up the safety scale a bit".

"I think you've got to be in the bigger, quality stocks," he stated.

So how does one position a portfolio in such an environment when inflation is of major concern? With those same larger, higher-quality companies, according to Beddow. He names CSL Limited (ASX: CSL), Macquarie Group Ltd (ASX: MQG), and BHP Group Ltd (ASX: BHP) as great places to start.

But Beddow also reckons ASX 200 energy companies like Santos Ltd (ASX: ATO) and Woodside Petroleum Limited (ASX: WPL) are also worthy of a look. Beddow says that demand for oil and gas "should be strong for more than a decade" and those companies are likely to be "solid performers as inflation rises and investment returns are harder to come by". He says packaging company Amcor (ASX: AMC) is also in the same boat.

Beddow also names the big banks, like Commonwealth Bank of Australia (ASX: CBA), as shares that "should be reasonable investments over the next year". That's due to the "traditional rule of thumb [that] their net interest margin would benefit from rising interest rates".

Mr Beddow's comments come as Argo reported its half-year financial earnings his morning. As my Fool colleague Bernd covered at the time, Argo reported a 91.5% rise in earnings per share (EPS), as well as a 14.3% rise in its interim dividend. Over the period, Argo topped up its investments in Macquarie, CSL, and EML Payments Ltd (ASX: EML). It unloaded positions in Boral Limited (ASX: BLD), AGL Energy Limited (ASX: AGL), and Crown Resorts Ltd (ASX: CWN).

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia owns and has recommended Amcor Limited. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

These ASX 200 shares could rise 20% to 50%

Big returns could be on the cards for owners of these shares according to analysts.

Read more »

rising gold share price represented by a green arrow on piles of gold block
Share Gainers

Here are the top 10 ASX 200 shares today

It was a horrible way to end the trading week today for ASX investors.

Read more »

Piggy bank sinking in water symbolising a record low share price.
52-Week Lows

9 ASX 200 shares tumbling to 52-week lows today

Israel's strike on Iran on Friday dragged several ASX 200 shares to new depths.

Read more »

Female miner smiling at a mine site.
Share Gainers

Up 834% in a year, guess which ASX mining stock is hitting new all-time highs today

The ASX mining stock has gone from strength to strength over the past year.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why COG, Karoon Energy, Netwealth, and Pilbara Minerals shares are dropping today

These ASX shares are ending the week deep in the red. But why?

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Fiducian Group, Northern Star, Paradigm, and Santos shares are charging higher

These shares are avoiding the market selloff.

Read more »

Dollar sign in yellow with a red falling arrow in front of a graph, symbolising a falling share price.
Share Market News

Why did the ASX 200 just sink to new 2-month lows on Friday?

It’s been a rocky week for the ASX 200. But why?

Read more »