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U.S. Inflation at a 30-Year High: 5 Sector ETFs to Win

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Annual consumer price inflation rate in the United States rose to 6.2% in October 2021, the highest since November of 1990 and above forecasts of 5.8%. While high inflation was broad-based, energy costs registered the biggest jump (30% vs 24.8% in September), namely gasoline (49.6%). This puts the spotlight on United States Gasoline Fund (UGA - Free Report) .

Inflation was hot for shelter, food, new vehicles, used cars and trucks, transportation services, apparel and medical care services, per tradingeconomics. Vanguard Real Estate Index Fund ETF Shares (VNQ - Free Report) , AdvisorShares Restaurant ETF (EATZ - Free Report) , First Trust NASDAQ Global Auto Index Fund (CARZ - Free Report) and iShares U.S. Healthcare Providers ETF (IHF - Free Report) are some of the sector ETFs that stand to gain from the latest inflation report.

Notably, the monthly rate of inflation went up to 0.9% from 0.4% in September, which was higher than forecasts of 0.6%. Below we highlight the sectors and their related ETFs that may gain from this inflation report in detail.

Energy

The energy sector saw a price gain of 4.8% in October. Gasoline logged a 6.1% price gains, marking its fifth successive monthly increase. The index for natural gas rose 6.6% sequentially, representing its largest monthly increase since March 2014. This calls for a look at this energy ETF.

United States Gasoline Fund (UGA - Free Report) – The United States Gasoline ETF seeks to track in percentage terms the movements of gasoline prices.

Real Estate

The shelter index gained 0.5% sequentially, as the indexes for rent and owners’ equivalent rent both rose 0.4% and the index for lodging away from home increased 1.4%.

Vanguard Real Estate ETF (VNQ - Free Report) – The Vanguard Real Estate ETF seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 Index.

Auto

Major vehicle indexes increased in October. The index for used cars and trucks gained 2.5% after declining in August and September. The index for new vehicles rose 1.4% in October, representing its seventh successive monthly increase.

First Trust NASDAQ Global Auto ETF (CARZ - Free Report) – The underlying NASDAQ OMX Global Auto Index is designed to track the performance of the largest and most liquid companies engaged in manufacturing of automobiles.

Restaurants

The food away from home index rose 0.8% in October after gaining 0.5% in September. The index for full-service meals jumped 0.9% and the index for limited-service meals shot up 0.8% sequentially. This points to the fact that restaurants are charging higher.

AdvisorShares Restaurant ETF (EATZ - Free Report) – The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business.

Medical Care Services

The medical care index rose 0.5% in October, representing its largest monthly increase since May 2020. The index for hospital services ticked up 0.5%, and the index for prescription drugs increased 0.6%.

iShares U.S. Healthcare Providers ETF (IHF - Free Report) – The underlying Dow Jones U.S. Select HealthCare Providers Index of the fund measures the performance of health care providers’ sub-sector of the U.S. equity market. It includes health maintenance organizations, hospitals, clinics, dentists, opticians, nursing homes plus rehabilitation & retirement centers.