Two New Ways To Hedge Inflation With ETFs

Index IQ has introduced two new exchange traded funds (ETFs) that are intended to provide a hedge against inflation.

The new ETFs offered by Index IQ are:

• IQ CPI Inflation Hedged ETF (CPI)
  
• IQ ARB Global Resources ETF (GRES)

As we enter a period of more inflationary pressures, investors will want to protect their assets against the odds. (SHV), 29% to SPDR Barclays Capital 1-3 Month T-Bill (BIL), 8% in iShares Barclays 20+ Year Treasury Bond (TLH), 7.3% in SPDR Gold Trust (GLD) and 1% in the CurrencyShares Japanese Yen Trust (FXY).

GRES is the first global resources hedged ETF. The fund 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.

The fund invests in five traditional sectors: livestock; precious metals; grains, food and fiber; industrial metals; and energy. Also found in the index are coal, timber and water.

IndexIQ utilizes a proprietary rules-based methodology to construct the underlying CPI and GRES indexes. The expense ratio for both ETFs comes in at 0.75%.

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