Federal Reserve officials recently went on record that they expect inflation to stay above the 2% target longer than expected. If inflation remains sticky, how can investors protect their portfolios? One way is by investing in Exchange-Traded Funds (ETFs) that can potentially hedge against the negative impacts of inflation. Here are seven ETFs that could help safeguard your investments during these uncertain economic times.
iShares TIPS Bond ETF (TIP)
The iShares TIPS Bond ETF provides exposure to U.S. Treasury Inflation-Protected Securities (TIPS), which are specifically designed to hedge against inflation. As the cost of living increases, the principal of TIPS increases, thus providing a potential buffer against inflationary pressures.
SPDR Gold Shares (GLD)
Gold has long been considered a safe-haven investment during times of economic uncertainty. The SPDR Gold Shares ETF offers investors exposure to gold without the need to buy and store physical gold. This ETF can be an effective hedge against inflation, as the value of gold often rises when the purchasing power of currency declines.
Vanguard Real Estate ETF (VNQ)
Real estate investments have historically proven to be a reliable hedge against inflation. The Vanguard Real Estate ETF tracks the performance of the MSCI US Investable Market Real Estate 25/50 Index, providing investors with diversified exposure to real estate investment trusts (REITs) across the United States.
iShares Global Infrastructure ETF (IGF)
Infrastructure investments can be a stable and reliable hedge against inflation. The iShares Global Infrastructure ETF gives investors access to a portfolio of global infrastructure companies involved in transportation, energy, and utilities sectors. These companies are often less sensitive to inflation due to their long-term, inflation-adjusted contracts.
First Trust Morningstar Dividend Leaders Index Fund (FDL)
Dividend-paying stocks can provide investors with a steady income stream and potential capital appreciation. The First Trust Morningstar Dividend Leaders Index Fund tracks the performance of the Morningstar Dividend Leaders Index, which comprises high dividend-paying U.S. stocks. This ETF can serve as a hedge against inflation, as companies with robust dividend policies are often better equipped to withstand economic turbulence.
Federal Reserve officials recently went on record that they expect inflation to stay above the 2% target longer than expected. If inflation remains sticky, how can investors protect their portfolios? One way is by investing in Exchange-Traded Funds (ETFs) that can potentially hedge against the negative impacts of inflation. Here are seven ETFs that could help safeguard your investments during these uncertain economic times.
iShares TIPS Bond ETF (TIP)
The iShares TIPS Bond ETF provides exposure to U.S. Treasury Inflation-Protected Securities (TIPS), which are specifically designed to hedge against inflation. As the cost of living increases, the principal of TIPS increases, thus providing a potential buffer against inflationary pressures.
SPDR Gold Shares (GLD)
Gold has long been considered a safe-haven investment during times of economic uncertainty. The SPDR Gold Shares ETF offers investors exposure to gold without the need to buy and store physical gold. This ETF can be an effective hedge against inflation, as the value of gold often rises when the purchasing power of currency declines.
Vanguard Real Estate ETF (VNQ)
Real estate investments have historically proven to be a reliable hedge against inflation. The Vanguard Real Estate ETF tracks the performance of the MSCI US Investable Market Real Estate 25/50 Index, providing investors with diversified exposure to real estate investment trusts (REITs) across the United States.
iShares Global Infrastructure ETF (IGF)
Infrastructure investments can be a stable and reliable hedge against inflation. The iShares Global Infrastructure ETF gives investors access to a portfolio of global infrastructure companies involved in transportation, energy, and utilities sectors. These companies are often less sensitive to inflation due to their long-term, inflation-adjusted contracts.
First Trust Morningstar Dividend Leaders Index Fund (FDL)
Dividend-paying stocks can provide investors with a steady income stream and potential capital appreciation. The First Trust Morningstar Dividend Leaders Index Fund tracks the performance of the Morningstar Dividend Leaders Index, which comprises high dividend-paying U.S. stocks. This ETF can serve as a hedge against inflation, as companies with robust dividend policies are often better equipped to withstand economic turbulence.
