As inflation concerns continue to influence market dynamics in 2025 — especially after the most recent CPI print — investors are increasingly seeking equity-based strategies that can provide protection against rising prices. Several new and existing ETFs have emerged, each with distinct approaches to address inflation risk through sector exposure, asset allocation, and portfolio construction.
Horizon Focuses on Inflation Winners
The $1.3 billion Horizon Kinetics Inflation Beneficiaries ETF (INFL) stands out for its concentrated strategy and high-conviction portfolio. The fund invests in companies expected to benefit directly from inflation, particularly those with pricing power and real asset exposure including Archer-Daniels-Midland, Texas Pacific Land, and Viper Energy Partners. With only 41 holdings, INFL is more narrowly focused than its peers, targeting niche opportunities such as landowners and commodities-linked firms.
As a result, the fund has been relatively volatile but also rewarding, returning 9.72% year-to-date, according to YCharts. This actively managed strategy comes at a premium, however, with an expense ratio of 0.85%, the highest among the group.
Fidelity Combines Multifactor Equity Selection
The $226 million Fidelity Stocks for Inflation ETF (FCPI) by contrast invests predominantly in U.S. large- and midcap stocks, with a particular focus on sectors sensitive to inflation such as energy, materials, and consumer staples. Notable holdings include Apple, Microsoft, and ExxonMobil, reflecting a blend of growth and inflation-resilient companies.
The index-based fund uses a multifactor model emphasizing valuation, quality, and momentum, while weighting its holdings by market capitalization. FCPI aims to provide investors with broad equity market exposure tailored to withstand inflationary pressures. With an expense ratio of 0.16%, FCPI has achieved a 8.43% return YTD, per YCharts.
Avantis Emphasizes Profitability & Valuation
The Avantis Inflation Focused Equity ETF (AVIE), with roughly $6 million in assets, takes a fundamentally driven approach, investing in U.S. companies that demonstrate strong profitability and attractive valuations. AVIE is another actively managed fund that targets inflation-sensitive sectors like industrials and materials. Top holdings include Berkshire Hathaway, Coca Cola, and Procter & Gamble.
Avantis prioritizes efficient portfolio management designed to optimize returns while minimizing transaction costs and risk. This strategy offers investors a value-tilted inflation hedge that seeks to capture companies poised to perform well in rising price environments. With an expense ratio of 0.25%, AVIE is the lowest-cost option among the four, appealing to long-term investors looking for an inflation-aware, evidence-based strategy.
According to YCharts data, AVIE has posted a YTD return of 1.62%.
Navigating Inflation With Equity ETFs
As inflationary pressures persist, these equity ETFs provide diverse tools for investors seeking to preserve purchasing power and potentially enhance portfolio resilience.
Each fund reflects a different philosophy on how best to protect equity portfolios against inflation, ranging from concentrated bets to diversified factor-driven strategies. For investors, selecting the right option depends on risk tolerance, desired exposure, and cost sensitivity in today’s inflation-uncertain landscape.
Originally published on Advisor Perspectives
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