For instance, the PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC) is the largest commodity-related ETF and tracks a broad basket of the 14 most heavily traded commodities. The iShares GSCI Commodity-Indexed Trust (NYSEArca: GSG) includes a broader group of 24 commodities, replicating the S&P GSCI Total Return Index.
Potential investors, though, should be aware that these two broad commodity funds track the derivatives market and not the commodities’ spot price, so there are risks associated with futures trading. Kizer also notes that physically backed commodity ETFs provide purer exposure, but they are limited to precious metals. Popular physical ETF options include the SPDR Gold Shares (NYSEArca: GLD) and iShares Silver Trust (NYSEArca: SLV).
In the equities space, some sector stocks and ETFs tend to hold up during inflationary periods. Ghodsi recommends stock funds like the Energy Select Sector SPDR (NYSEArca: XLE) and iShares S&P Global Materials (NYSEArca: MXI). Moreover, Ghodsi warns that the consumer discretionary sector tend to underperform when inflation rises. [Energy ETFs Could be Ready to Rebound]
Lastly, the IQ Real Return ETF (NYSEArca: CPI) provides a multi-asset inflation hedging approach. Specifically, the ETF includes exposure to short-term Treasuries, short contracts on Treasury bonds, the S&P 500 and Russell 2000.
For more information on the inflation, visit our inflation category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of GLD.