Deep Dive: Mutual-fund manager who is whipping the S&P 500 warns of inflation risks

Low inflation and interest rates, a growing economy, near-full employment and central-bank support have enured U.S. investors to typical stock-market risks.

In fact, passive index funds based on the S&P 500 SPX, -0.64% and Dow Jones Industrial Average DJIA, -0.49% are recording new highs weekly in what has become the seventh year of the bull market.

But with Federal Reserve officials hinting at an increase for official interest-rate targets before the end of the year and global risks piling up, investors may soon find themselves in defensive mode.

“I came of age in the late ’70s and early ’80s.

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