As inflation remains at 2.8%, still above the Government’s target of 2%, now may be the time for investors to think about inflation-proofing their portfolios.

Here, experts reveal the best strategies – and funds – investors can use to combat the destructive impact of inflation:

Tom Stevenson, investment director at Fidelity Worldwide Investment

1. Invest in equities

In a modestly inflationary environment, equities are a good hedge against rising prices. This is because shares represent a real claim on a company’s assets and its cash flows which can rise in line with prices if a company has any pricing power.

Inflation rising to about 4% from a low base is often associated with rising equity valuations because it usually means that the economy is recovering. Inflation rising much above this level, however, can result in valuations falling back again because it can be associated with rising interest rates. Rising longevity means retirees should consider a higher equity weighting than was considered appropriate when people did not live so long.

2. Gain exposure to real assets

Real assets offer some protection against inflation – these might include things like airports, oil wells, property and other infrastructure. Shares in companies exposed to these assets are a much more flexible way of accessing this protection than the assets themselves, which can often be quite difficult to trade in and out of.

3. Exploit the compounding benefits of income

Equity income can be attractive in a modestly inflationary environment because the compounded growth of reinvested dividends can maintain the real value of your investments. Reinvested income provides the lion’s share of total returns over the long run.

4. Consider assets that are scarce

Always buy the best, scarcest assets you can and especially things that they can’t make any more – land, prime property in world-class cities, wine and classic cars can all do well in inflationary environments but the latter two are also prone to horrendous busts as well as booms. Take great care with these.

Darius McDermott, managing director at Chelsea Financial Services

If you are really worried about inflation, then invest in a fund which should beat the inflation rate, even if it rises further.

The M&G Inflation-Linked Bond would be an option, or an equity income fund paying a dividend higher than inflation like Threadneedle UK Equity Alpha Income (4.6%).

Real assets like commodities and property generally do well in periods of higher inflation, as do equities.

Consider a fund like Fidelity Global Real Assets, which is designed to deliver inflation-resistant capital growth. It does this by investing in companies backed by real assets which have strong pricing power. The ability to pass on rising costs associated with inflation makes these companies very attractive in hedging out inflation.

If you want to look at the areas where inflation is really coming through then you might want to consider an investment in a fund specifically targeted at these areas, such as an agriculture fund or energy fund like Baring Global Agriculture and Investec Global Energy funds.