real returns are being eroded as inflation soars but fund manager brian arcese has a number of stock picks he thinks are effective inflation hedges us inflation rose again in april  with the consumer price index increasing 83 from a year ago  higher than expected but a slight ease from marchs peak meanwhile the federal reserves preferred inflation gauge rose 49 in april from a year ago a slower pace than marchs 52 suggesting that price pressures c ould be showing signs of easing  nevertheless inflation remains at an elevated level and continues to be a source of volatility for investors our expectation would be for inflation to moderate from here but in a base case to remain meaningfully above where it has been for the past 15 years arcese said arcese is a portfolio manager at foord asset management a boutique investment firm with 8 billion of assets under management he manages the foord international fund a multiasset portfolio that aims to deliver returns in excess of us inflation over five years or more as well as the foord global equity fund an equityonly product benchmarked against the msci world index speaking to cnbc on monday  he noted that beating inflation over time has been a hallmark of what the foord international fund does we are not necessarily aiming to deliver inflation 5 in any given quarter or any given year but certainly through the cycle the fund has delivered annualized returns of 67 since its inception 25 years ago comfortably beating the annualized inflation rate of 24 over the same period we focus a lot on cash flow and the quality of the management team and how much earnings the business can generate and in particular earnings based on cash flow arcese added commodities as an inflation hedge around 20 of the foord international fund is directly exposed to commodities through a mix of commoditylinked equities and physical commodities in any type of inflation its the real assets that protect against capital erosion and so owning equities that own real assets is the primary reason that these are really the best hedges arcese told cnbc pro he acknowledged that soaring commodity prices this year meant some commodity stocks could look expensive but insisted that commodities will remain a meaningful part of his portfolio we agree with many in the market that commodity prices in certain pockets have probably gotten ahead of themselves we have started to slowly trim our holdings but we are still very comfortable investing in many of these names for the long term he said stock picks within the mining subsector arcese said the firm only invests in high quality mining companies with the highestcalibre management as well as those who return a significant portion of cash generated to shareholders one of his top picks in this space is copper miner freeportmcmoran  which he described as one of the lowest cost copper producers globally and a payer of dividends the return that we are trying to provide our investors is really a total return so it can be a combination of capital appreciation and dividends that companies pay back to shareholders we aim to invest in companies that are very happy to return a significant amount of that cash to shareholders he said other mining stocks that arcese likes include mines operator pan american silver  precious metals streaming company wheaton precious metals  australian rareearths miner lynas and irish mining firm kenmare resources  within the wider commodities space he also likes chemicals manufacturers fmc and livent  canadian fertilizer company nutrien and bayer 