On this page, we attempt to illustrate why hedge funds have historically outperformed during periods of “high” inflation. On the left, we show the correlation of the S&P 500, which tends to be lower during periods of higher inflation. On the right, we show S&P 500 return dispersion, which tends to be higher during periods of “high:” inflation. In other words, when we see greater levels of inflation, equities, historically, have been less correlated with each other and the range of returns have been wider.