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4 Sector ETFs to Win from 2-Year Slow October Inflation Data
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The Consumer Price Index (CPI) showed prices rose 0% over last month and 3.2% over the prior year in October, a deceleration from September's 0.4% monthly increase and 3.7% annual gain in prices. Core inflation marked its slowest pace in over two years.
Economists' expectations fell short of the actual data, as they had predicted a 0.1% month-over-month increase and a 3.3% year-over-year increase in prices. Core prices were also anticipated to rise by 0.3% over the prior month and 4.1% over the previous year.
Against this backdrop, below we highlight a few sector ETFs that should gain in the near term.
Sector ETFs to Gain
Real Estate – Kelly Residential & Apartment Real Estate ETF
Weighted shelter makes up 32.77% of CPI, of which 7.8% is rent and 23.68% is private housing, per data from MacroMicro. The shelter index rose 0.3% over the month after gaining 0.6% in September. The index for rent rose 0.5% in October, and the index for owners' equivalent rent increased 0.4% sequentially.
The ETF RESI should thus win. The underlying Strategic Residential & Apartment Real Estate Sector Index is a rules-based index that consists of U.S. and Canada-listed companies engaged in Apartment Buildings, Single-Family Rental Homes, Student Housing or Manufactured Homes. The fund yields 7.44% annually.
The transportation index jumped 0.8% sequentially in October after a rise of 0.7% in September. The index gained 9.2% year over year. SPDR S&P Transportation ETF (XTN - Free Report) has a Zacks Rank #2. Trucking takes about 40% of the fund, followed by Airlines and Air Freight & Logistics.
Medical Care Commodities – iShares U.S. Medical Devices ETF (IHI - Free Report)
The medical care commodities index rose 0.3% sequentially after an uptick of 0.3% in September. The index is, however, down 2% year over year. The Zacks Rank #2 (Buy) fund Health Care Equipment takes about 80% of the fund.
The food away from index increased 0.4% sequentially in October, after rising by the same amount in September. The index has risen 5.4% year over year.
This ETF is active and does not track a benchmark. 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.
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4 Sector ETFs to Win from 2-Year Slow October Inflation Data
The Consumer Price Index (CPI) showed prices rose 0% over last month and 3.2% over the prior year in October, a deceleration from September's 0.4% monthly increase and 3.7% annual gain in prices. Core inflation marked its slowest pace in over two years.
Economists' expectations fell short of the actual data, as they had predicted a 0.1% month-over-month increase and a 3.3% year-over-year increase in prices. Core prices were also anticipated to rise by 0.3% over the prior month and 4.1% over the previous year.
Against this backdrop, below we highlight a few sector ETFs that should gain in the near term.
Sector ETFs to Gain
Real Estate – Kelly Residential & Apartment Real Estate ETF
Weighted shelter makes up 32.77% of CPI, of which 7.8% is rent and 23.68% is private housing, per data from MacroMicro. The shelter index rose 0.3% over the month after gaining 0.6% in September. The index for rent rose 0.5% in October, and the index for owners' equivalent rent increased 0.4% sequentially.
The ETF RESI should thus win. The underlying Strategic Residential & Apartment Real Estate Sector Index is a rules-based index that consists of U.S. and Canada-listed companies engaged in Apartment Buildings, Single-Family Rental Homes, Student Housing or Manufactured Homes. The fund yields 7.44% annually.
Transportation – SPDR S&P Transportation ETF (XTN - Free Report)
The transportation index jumped 0.8% sequentially in October after a rise of 0.7% in September. The index gained 9.2% year over year. SPDR S&P Transportation ETF (XTN - Free Report) has a Zacks Rank #2. Trucking takes about 40% of the fund, followed by Airlines and Air Freight & Logistics.
Medical Care Commodities – iShares U.S. Medical Devices ETF (IHI - Free Report)
The medical care commodities index rose 0.3% sequentially after an uptick of 0.3% in September. The index is, however, down 2% year over year. The Zacks Rank #2 (Buy) fund Health Care Equipment takes about 80% of the fund.
Restaurants – AdvisorShares Restaurant ETF (EATZ - Free Report)
The food away from index increased 0.4% sequentially in October, after rising by the same amount in September. The index has risen 5.4% year over year.
This ETF is active and does not track a benchmark. 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.