Real Return Strategy Objectives and Philosophy


Real Return Strategy Objectives

  • The Real Return Strategy objective is to provide investors with protection against inflation and monetary instability through investments that are likely to perform well during inflationary periods.

Real Return Strategy Philosophy

  • The Real Return Strategy centers around our ability to forecast inflation.
  • Research shows that inflation is primarily driven by growth in the monetary base.
  • We use a proprietary model to forecast the direction of inflation.
  • Our model indicates the trough of deflation occurred during the summer of 2009 and that the U.S. may return to a positive rate of inflation in 2010 and 2011.
  • There is the potential for the rate of inflation to reach significant levels.




William Lee Tedford, Jr., an Executive Vice President of Stephens Inc. and Chairman of the Fixed Income Management Committee and Portfolio Manager of SCM, has developed and uses a proprietary model designed to forecast inflation.  The model reflects past and historical relationships of inflation to monetary base and oil prices.   The future behavior of inflation is influenced by many factors (many of which are themselves unpredictable) and will not necessarily continue to follow historical patterns.  The model, by itself, cannot guide an investor as to what securities should be bought or sold nor as to when to buy or sell.