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Be Thankful to These ETF Areas in 2022

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The year 2022 has been all about surging global inflation due to supply-chain issues, the Russia-Ukraine war, high energy prices, a commodity super-cycle, a super-hawkish Fed, rising rates across the globe, risk-off trade sentiments and a global market crash.

The S&P 500 is off about 17%, the Dow Jones has retreated 7.1%, the Nasdaq has lost 28.8%, the Russell 2000 has fallen 17.6% this year (as of Nov 18, 2022).

Against this backdrop, below we highlight a few ETF areas that bucked the losing trend and emerged winners.


Credit Suisse S&P MLP Index ETN (MLPO - Free Report) – Up 118.2%

Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) – Up 79.2%

Oil prices have been in decent shape lately with WTI crude ETF United States Oil Fund LP (USO) gaining 25% this year mainly on geopolitical tension in East Europe, OPEC+ output cuts and demand recovery due to economic reopening. Prices increased considerably as OPEC+ producers agreed on Oct 5 deep output cuts, seeking to spur a recovery in crude prices despite repeated calls from U.S. President Joe Biden’s administration for the group to pump more to lower fuel prices and contain global inflation.

Rate Hedge ETF

Simplify Interest Rate Hedge ETF (PFIX - Free Report) – Up 83.8%

Advocate Rising Rate Hedge ETF (RRH - Free Report) – Up 39.1%

The interest rate hedge corner of the fixed-income market has been an area to watch lately due to rising interest rates. Investors are flocking to PFIX and RRH to combat rising rate worries. The Fed has hiked rates massively this year. Federal Reserve Bank of Atlanta President Raphael Bostic recently said that he was comfortable to retreat from 75-basis-point increases at the next meeting but declared that rates may reach 4.75%-5% before the Fed is done with its current tightening cycle.

Defensive ETF

KFA Mount Lucas Managed Futures Index Strategy ETF (KMLM - Free Report) – Up 32.3%

AGFiQ US Market Neutral Anti-Beta Fund (BTAL - Free Report) – Up 15.2%

As risk-off trade sentiments prevailed this year, defensive investments gained momentum. Rising rate concerns are rife globally. And this concern is not likely to go away soon. Hence, equity market volatility is here to stay for some time. As a result, investors are likely to consider alternative assets to protect their portfolios against volatility.


iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN - Free Report) – Up 24.7%

iShares U.S. ETF Trust iShares GSCI Commodity Dynamic Roll Strategy ETF (COMT - Free Report) – Up 21.2%

After a decade of underperformance, commodities are experiencing a huge rally due to the Russia-Ukraine war, sky-high inflation, pent-up demand after the COVID-19 pandemic and widespread vaccination. From crude to metals to crops, commodities performed great in 2022 as investors betted big on inflationary expectations and eyeing everything that provide hedges for inflation. Especially, the agricultural commodity market has been an area to watch lately, given worries over the growing global food crisis and rising prices.


Invesco S&P Ultra Dividend Revenue ETF (RDIV - Free Report) – Up 9.2%

WisdomTree US High Dividend Fund (DHS - Free Report) – Up 8.6%

Dividend-paying companies are usually good for value investing and are in demand when volatility flares up. Investors have two options in this field – one with steady dividend growth (or dividend aristocrats) and the other with high yield. Companies that raise dividend regularly appear steadier than those that offer higher yields. But then high-yielding ones also make up for the capital losses to a large-extent, if there is any. Several dividend ETFs offered better returns than the S&P 500 this year.




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