Inside Chris Brycki’s unconventional inflation-busting portfolio

When inflation surged back into the global economy as it attempted to normalise following the pandemic, most investors instinctively reached for familiar defences.

Stocks with attractive dividends, listed property securities and quality bonds. These were the three ETF categories that attracted the most inflows in 2023, according to ASX data for that year.

But where did money leave the ETF industry back then? Commodities. That is precisely where Stockspot founder and experienced investor Chris Brycki decided to go, alongside allocations to emerging markets and global infrastructure.

He believed this was no ordinary inflation cycle, and that a conventional playbook built around high-income assets would not do a good enough job of protecting purchasing power if inflation expectations stayed elevated.

“The core idea is that inflation changes which assets lead returns,” Brycki says.

“When inflation expectations matter more, a traditional share-and-bond portfolio doesn’t behave the way people expect it to.”

Over afternoon tea at Shelley’s Café in Barangaroo, Brycki shared with us the thesis behind the inflation portfolio he launched in October 2023. It begins with a simple question: what actually works when inflation expectations rise and stay there?

It proved a timely conversation, given the recent Livewire Outlook Series survey found inflation was investors’ top concern, highlighting growing anxiety about portfolios keeping ahead of rising living costs.

There’s inflation, and then there are inflation expectations

A key insight behind Brycki’s thinking is that inflation is not a single state, but a series of regimes, and portfolios behave very differently across them.

“When inflation is low and stable, most growth portfolios behave similarly. Shares are driven by earnings growth, bonds provide diversification, and inflation isn’t the dominant risk,” he explains.

That relationship begins to break down as inflation expectations rise, as shown in the chart below.

“As inflation increases, asset behaviour diverges. Bonds become less defensive. Long-duration growth assets become more sensitive to interest rates. Real assets play a much larger role in protecting purchasing power,” Brycki says.

History offers a good example. During the 1970s, both shares and bonds experienced what amounted to a lost decade in real terms, while gold rose roughly twentyfold.

“That episode shows how asset leadership can shift for extended periods when the inflation backdrop changes,” he says. “These regimes can last much longer than investors assume.”

Why yield isn’t the answer

Rather than treating inflation protection as a defensive overlay, Brycki framed the "Topaz" inflation portfolio as an alternative way of expressing high growth.

One of the more counterintuitive features of the portfolio is its lack of emphasis on income, something investors often find reassuring because it generates visible cash returns that appear to exceed inflation.

“Income often feels reassuring because it looks tangible. You see cash arriving in your account, and it feels like you’re making progress,” Brycki says, adding that this reassurance can be misleading.

“Income and capital growth are interchangeable. What matters is total return. If a portfolio grows in value, you can sell down a small amount of capital to generate cash flow when you need it.”

The portfolio currently produces relatively low income, under 2% per year, with most returns delivered through capital growth.

“That can be beneficial from a tax perspective,” Brycki adds. “Less income today means more return deferred as capital growth, which can improve after-tax outcomes over time.”

What worked in 2025 and why

As at December 2025, the portfolio was allocated across the following funds:

Precious metals ETFs were the clear winners of 2025. Gold rose over 60% during the year, while gold mining equities gained around 140% and silver soared ~130%.

“Those moves were driven by geopolitical risk, renewed trade tensions, a weaker US dollar, record central bank buying and rising investor demand,” Brycki says.

Over the 2025 calendar year, the portfolio delivered a return of 50.4% and 30.1% p.a. since inception.

Looking beyond the recent rally

After such a strong run, Brycki is cautious about extrapolating recent returns.

“The portfolio is designed so leadership rotates over time, rather than relying on any single asset to do all the work,” he says.

That means even if forward returns from gold and silver are lower, they can still add value by behaving differently as inflation expectations shift.

If the market is entering a more inflation-driven regime, assets that benefit from those conditions could experience a prolonged period of outperformance, albeit with higher volatility, relative to traditional growth portfolios. In more stable or falling inflation environments, those differences typically fade and long-term return paths tend to converge again.

"Our goal with this portfolio isn't to forecast a repeat of the 1970s," Brycki says.

“It’s to recognise that inflation cycles can reshape return outcomes for many years, and to ensure investors are positioned for those changes, while remaining diversified and focused on long-term outcomes.”