Inflation-fighting ETFs: How to invest
Russia-Ukraine impact: Experts break down market volatility amid war
Money Map Press chief investment strategist Shah Gilani and Annandale Capital chairman George Seay give their take on the market’s volatility amid the Russia-Ukraine war on ‘Making Money.’
Investors looking to mitigate the impact of rising inflation on their portfolios may find new opportunities in select exchange-traded funds.
COMMODITIES HAVE BEST WEEK EVER AS RUSSIA, UKRAINE SPARKS BUYING
The recently launched Amplify Inflation Fighter ETF provides investors with access to a mix of stocks and commodities that seek to benefit directly or indirectly from inflation. The fund's portfolio manager, Mike Venuto, told FOX Business that it focuses on real estate as a store of value.
"There's plenty of real estate ETFs out there, but all of them are populated with [real estate investment trusts]," he explained. "REITs are not a great store of value because they're structured from a tax perspective to give back to investors the income. And to that end, they tend to move with interest rates and really not act very well in an inflationary environment. They tend to lose money in inflationary environments."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| IWIN | AMPLIFY ETF TR AMPLIFY INFLATION FIGHTER E | 26.09 | +0.15 | +0.60% |
The Amplify Inflation Fighter ETF focuses on six components: land development companies, commodity REITs, home construction companies, real estate technology companies, consumer-related real estate names and actual commodities, including corn, copper, Bitcoin and gold. The fund may invest up to 50% of its net assets in commodity futures, while the rest of the portfolio will be in stocks and other securities.
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Since its launch on Feb. 2, the Amplify Inflation Fighter ETF is up about 5% year-to-date. Venuto noted that corn and gold prices have been the greatest contributors to the ETF's overall returns, while the greatest detractor has been real estate technology companies, which hold the smallest weight in the fund.
COMMODITIES HAVE BEST WEEK EVER
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GLD | SPDR GOLD SHARES TRUST – EUR ACC | 189.84 | +3.45 | +1.85% |
Last week, the Goldman Sachs Commodity Index jumped nearly 20%, the biggest weekly advance on record.
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In January, the consumer price index surged 7.5%, the fastest increase since February 1982. On Thursday, the Labor Department will release February's consumer price index, which is expected to continue an upward trend as Russia's invasion of Ukraine has sent commodity prices soaring.
While Venuto is expecting inflation to remain at a sustained high number, he believes that this week's CPI will not fully capture the impact of the Russia-Ukraine conflict.
"I think the CPI will be kind of more muted this week, but I think the next one is going to scare the heck out of people because this whole transitory argument is gone now," he said.
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When it comes to investing in an inflationary environment, Venuto emphasized that investors have to "throw out their playbook" and start to look at things differently.
"There's a lot of things that work differently in an environment where the Fed is not accommodative," he added. "Most people have lived in an accommodative Fed for their entire investing career."
In addition to the Amplify Inflation Fighter ETF, Venuto says the Teucrium Agricultural Fund, WisdomTree's Enhanced Commodity Strategy Fund, the Simplify Interest Rate Hedge ETF and the FolioBeyond Rising Rates ETF are all good investments to combat inflation.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TAGS | TEUCRIUM COMMODITY TRUST AGRICULTURAL FD | 32.59 | -2.25 | -6.46% |
| GCC | WISDOMTREE TRUST ENHANCED COMMODITY STRATEGY | 27.18 | -0.22 | -0.80% |
| PFIX | SIMPLIFY EXCHANGE TRADED FDS SIMPLIFY INT RATE HEDGE ETF | 45.00 | +0.30 | +0.67% |
| RISR | TIDAL ETF TRUST FOLIOBEYOND RISING RATES ET | 29.07 | +0.06 | +0.21% |
Venuto expects the Federal Reserve to hike rates at least twice this year but argued that progress on combating inflation likely won't come until after the midterm elections.
"I don't see any chance that inflation is combated in any meaningful way until the fourth quarter of this year," he said. "And then that's still being optimistic."
FOX Business' Megan Henney contributed to this report
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