Two new ETFs designed to help investors hedge against inflation have been introduced by IndexIQ.
The IQ CPI Inflation Hedged ETF (CPI) and IQ ARB Global Resources ETF (GRES) are both designed to provide investors with additional tools to protect their assets by seeking a real return at or above the rate of inflation.
The IQ CPI Inflation Hedged ETF tracks the performance of the IQ CPI Inflation Hedged Index which is designed to give investors a hedge against changes in the U.S. inflation rate by providing a “real return,” or a return above the rate of inflation as measured by changes in the Consumer Price Index.
The IQ ARB Global Resources ETF seeks to solve the problems associated with the significant overweight in the energy sector inherent in other broad-based commodity products. GRES also provides a hedge against inflation and a real return through exposure to a diversified portfolio of commodity-related equities.
IndexIQ utilizes a proprietary rules-based methodology to construct the underlying CPI and GRES indexes. The IQ CPI Inflation Hedged Index is comprised primarily of liquid securities that represent asset classes affected by changes in inflation, such as equities, fixed income, commodities, currencies, and real estate, providing the opportunity to build a portfolio that more dynamically reflects the impact of inflation.
The IQ ARB Global Resources Index uses momentum and valuation factors to identify global companies that operate in eight commodity-specific market segments and whose equity securities trade in developed markets, including the U.S. The segments include livestock; precious metals; grains, food and fiber; energy; industrial metals; timber; water; and coal. It also includes short exposure to global equities as a partial equity market hedge.
For more ETF investing choices, see the Fixed Income TIPS ETF directory.