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Commodity ETFs to Hedge against Inflation

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  • (1:00) - Should Investors Begin To Worry About Inflation?
  • (6:30) - How Can You Protect Your Portfolio From Incoming Inflation?
  • (11:00) - Oil and Natural Gas Expectations Heading Into 2022
  • (18:10) - Why Is Gold Continuing To Underperform?
  • (25:20) - Understanding The Reason Platinum Is On The Decline
  • (30:20) - GraniteShares Bloomberg Commodity Broad Strategy  No K-1 ETF: COMB
  • (34:00) - GraniteShares XOUT U.S. Large Cap ETF: XOUT
  •                Podcast@Zacks.com

 

In this episode of ETF Spotlight, I speak with William Rhind, CEO at GraniteShares, about rising inflation and how investors can protect their portfolios.

Recent inflation reports have been much hotter than expected. Persistent supply chain disruptions, labor shortages and strong consumer demand continue to push prices higher.

Should investors worry about inflation now?

Value stocks have generally outperformed growth stocks in periods of rising prices. Commodities have also provided some protection against inflation, but commodities are generally volatile. Which commodities provide the most effective hedges against inflation?

Oil and natural gas prices have come down since mid-October, but they are still up significantly this year. Earlier this week, OPEC left its global oil demand and supply forecasts for 2021 and 2022 unchanged as it believes the Omicron variant’s impact on the global economy is likely to be mild.

The GraniteShares Bloomberg Commodity Broad Strategy No K1 ETF (COMB - Free Report) is one of the cheapest broad-based commodity ETFs. The actively managed fund provides exposure to 23 different commodities through futures contracts.

Gold, which is widely seen as a hedge against inflation, has underperformed this year.

The GraniteShares Gold Trust (BAR - Free Report) is down about 6% year-to-date as the precious metal heads for its first annual loss in three years.

Platinum, which was referred to as “rich person’s gold” commanded a price premium over gold before 2015. It is now trading at a significant discount to gold. The GraniteShares Platinum Trust (PLTM - Free Report) is down about 14% in 2021.

Should investors look at gold and platinum now?

The GraniteShares XOUT U.S. Large Cap ETF seeks to identify and then screen out companies that are likely to underperform. Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) are the top holdings in fund, which has beaten the S&P 500 index since its inception.

Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of ETF Spotlight and also make sure to subscribe! If you have any comments or questions, please email podcast@zacks.com

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