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Inflation Beneficiary ETFs in Focus as Prices Soar

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Inflation is one of the biggest concerns for investors lately. The CPI index for February jumped to a 7.9% annual rate, the highest since January 1982. Gasoline, housing, and food prices were the biggest contributors to the increase.

Russia and Ukraine are among the world’s largest suppliers of oil, natural gas, wheat, corn, edible oils and metals like aluminum, nickel, and palladium. The war has further pushed energy and commodity prices higher and disrupted global shipping networks.

Resurgence of Covid-19 and renewed lockdowns in China, due to its zero-tolerance policy, are adding even more disruptions to the global supply chains.

Before the war in Ukraine started, many experts predicted that inflation would cool off in spring as supply chains improve after pandemic driven disruptions. It now appears that higher inflation could persist for longer.

Investors could look at ETFs that aim to hedge against or benefit from inflation. The actively managed Horizon Kinetics Inflation Beneficiaries ETF (INFL - Free Report) invests in companies expected to benefit from inflation. Texas Pacific Land (TPL - Free Report) Charles River Laboratories International (CRL - Free Report) are its top holdings. 

The Fidelity Stocks for Inflation ETF (FCPI - Free Report) holds companies with attractive valuations, high quality profiles and positive momentum, in industries that tend to outperform in inflationary environments. Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) are its top holdings.

The VanEck Inflation Allocation ETF (RAAX - Free Report) is an actively managed fund of funds that provides exposure to inflation fighting assets.  It holds ETFs that invest in real assets including commodities, natural resource equities, REITs, MLPs, gold and bitcoin.  The Invesco Optimum Yield Diversified Commodity Strategy No K1 ETF (PDBC - Free Report) and the Energy Select Sector SPDR ETF (XLE - Free Report) are among its holdings.

To learn more about these ETFs, please watch the short video above.

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