UK inflation punched through the 2% target with ease in February. The 2.3% rate of year-on-year price growth represented the highest level of headline CPI since 2013. Accordingly, assets able to protect portfolios from the so-called ‘cruellest tax’ should be on  investors’ shopping lists.

As the chart shows, one closed-ended fund with a formidable record of combating inflation is the Scottish American Investment Company (SCAM). Baillie Gifford-managed ‘SAINTS’ aims to grow the dividend at a faster rate than inflation and boasts a 37 year track record of consecutive dividend increases.

Manager Dominic Neary buys exceptional companies delivering robust cash flow growth and dependable dividends.

Leading equity holdings include Coca Cola, Procter & Gamble and luxury goods group Kering. ‘The business is a cash-generative one,’ says Neary of Kering, ‘so the dividend should be dependable. We also think the Pinault family have been excellent stewards of the business and we are glad to have the opportunity to invest alongside them.’ At 339.5p, Scottish American is a portfolio must for its inflation-busting credentials. (JC)

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