U.S. Inflation At A 40-Year High: 4 Sector ETFs To Win
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The annual inflation rate in the United States accelerated to 7.5% in January of 2022, marking a new high since June of 1982, well above market forecasts of 7.3%. Energy led to the jump while labor shortages and supply disruptions also caused a slump. Notably, inflation was 0.6% in January sequentially.
Inflation was hot for shelter, food, new vehicles, used cars and trucks, apparel, and medical care services, per TradingEconomics. Vanguard Real Estate Index Fund ETF Shares (VNQ - Free Report), AdvisorShares Restaurant ETF (EATZ - Free Report), SPDR S&P Retail ETF (XRT), and iShares U.S. Healthcare Providers ETF (IHF - Free Report) are some of the sector ETFs that stand to gain from the latest inflation report.
Real Estate - Vanguard Real Estate ETF (VNQ - Free Report)
The index for shelter increased 0.3% in January as the rent index jumped 0.5% and the owners’ equivalent rent index rose 0.4%. The Vanguard Real Estate ETF seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 Index.
Apparel - SPDR S&P Retail ETF (XRT)
The price index for apparel increased 1.1% in January after logging the same increase in December. Prices increased 5.3% year-over-year.
The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market, and NASDAQ Small Cap exchanges. The Retail Index is a modified equal weight index.
Restaurants - AdvisorShares Restaurant ETF (EATZ - Free Report)
The food away from home index rose 0.7% sequentially in January after rising 0.6% in December. The index for full-service meals jumped 0.7%. The index for food away from home rose 6.4% year-over-year, the largest one-month increase since January 1982. This points to the fact that restaurants are charging higher.
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 - iShares U.S. Healthcare Providers ETF (IHF - Free Report)
The medical care index rose 0.7% sequentially in January. The index for hospital services increased 0.5% and the index for prescription drugs rose 1.3%, while the index for physicians’ services declined 0.1%.
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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