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Annual inflation rate in the United States slowed to 8.3% in April from a 41-year high of 8.5% in March, per tradingeconomics, but less than market forecasts of 8.1%. Energy prices surged 30.3%, below 32% in March thanks to a moderate rise in gasoline prices (43.6% versus 48%) while fuel oil increased more (80.5% versus 70.1%). On the other hand, food prices jumped 9.4%, the maximum since April 1981 and prices also rose faster for shelter (5.1% vs 5%) and new vehicles (13.2% vs 12.5%).
Against this backdrop, we suggest a few sector ETFs that can be worth investing at the time of rising inflation. Below we highlight those.
Transportation Services
The index for transportation increased 3.1% in April after a 2% uptick in March.
iShares U.S. Transportation ETF (IYT - Free Report) – The Zacks Rank #2 (Buy) fund measures the performance of companies from the Industrial Transportation, Airline and General Industrial Services industries of the U.S. equity market.
Auto
The price inflation of new cars has been palpable. The index for new vehicles increased 1.1% in April after rising 0.2% the previous month. First Trust S-Network Future Vehicles & Technology ETF (CARZ - Free Report) can thus be played on the uptick in car price inflation.
The Zacks Rank #3 (Hold) First Trust SNetwork Future Vehicles & Technology ETF (CARZ - Free Report) follows the S-Network Electric & Future Vehicle Ecosystem Index, which constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
Utilities
The index for utility gas service increased 3.1% in April after a rise of 0.6% in March.
Utilities Select Sector SPDR ETF (XLU - Free Report) – The underlying index seeks to provide an effective representation of the Utilities sector of the S&P 500 Index.
Restaurants
The food away from home index rose 0.6% sequentially in April after rising 0.3% in March. 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% sequentially in April after an uptick of 0.6% March.
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.
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5 Sector ETFs to Win from an 8%+ U.S. Inflation
Annual inflation rate in the United States slowed to 8.3% in April from a 41-year high of 8.5% in March, per tradingeconomics, but less than market forecasts of 8.1%. Energy prices surged 30.3%, below 32% in March thanks to a moderate rise in gasoline prices (43.6% versus 48%) while fuel oil increased more (80.5% versus 70.1%). On the other hand, food prices jumped 9.4%, the maximum since April 1981 and prices also rose faster for shelter (5.1% vs 5%) and new vehicles (13.2% vs 12.5%).
Against this backdrop, we suggest a few sector ETFs that can be worth investing at the time of rising inflation. Below we highlight those.
Transportation Services
The index for transportation increased 3.1% in April after a 2% uptick in March.
iShares U.S. Transportation ETF (IYT - Free Report) – The Zacks Rank #2 (Buy) fund measures the performance of companies from the Industrial Transportation, Airline and General Industrial Services industries of the U.S. equity market.
Auto
The price inflation of new cars has been palpable. The index for new vehicles increased 1.1% in April after rising 0.2% the previous month. First Trust S-Network Future Vehicles & Technology ETF (CARZ - Free Report) can thus be played on the uptick in car price inflation.
The Zacks Rank #3 (Hold) First Trust SNetwork Future Vehicles & Technology ETF (CARZ - Free Report) follows the S-Network Electric & Future Vehicle Ecosystem Index, which constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
Utilities
The index for utility gas service increased 3.1% in April after a rise of 0.6% in March.
Utilities Select Sector SPDR ETF (XLU - Free Report) – The underlying index seeks to provide an effective representation of the Utilities sector of the S&P 500 Index.
Restaurants
The food away from home index rose 0.6% sequentially in April after rising 0.3% in March. 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% sequentially in April after an uptick of 0.6% March.
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.