The annual inflation rate in the United States accelerated for a second straight month to 3.7% in August from 3.2% in July, above market forecasts of 3.6%. Oil prices have been on the rise in the previous two months, which has been held responsible for the high price inflation. Core inflation rate however, which excludes food and energy, slowed for the fifth month to 4.3%, in line with market expectations.

In August 2023, energy cost fell 3.6% year over year, much less than a 12.5% drop in July, with prices declining at a smaller pace for fuel oil (-14.8% vs -26.5%) and gasoline (-3.3% vs -19.9%). Also, cost of transportation services (10.3% vs 9%) increased more.

With oil prices hovering around a 10-month high level, we expect future upward pressure on inflation. Against this backdrop, we suggest a few ETFs that can be worth investing at the time of higher inflation.

ETFs in Focus

Amplify Inflation Fighter ETF (IWIN)

IWIN is an actively-managed ETF, investing in asset classes that look to benefit, either directly or indirectly, from inflation. IWIN intends to provide investors with long-term capital appreciation in inflation-adjusted terms.

The portfolio includes an active mix of asset miners (28%), homebuilders (18.40%), commodities (17.50%), land development (17.10%), homebuilders (15.97%), commodity REITs (12.30%) and real estate technology (6.70%). The expense ratio of IWIN is 0.92%.

AXS Astoria Inflation Sensitive ETF (PPI)

AXS Astoria Inflation Sensitive ETF is an actively managed, broadly diversified ETF that seeks long-term capital appreciation in inflation-adjusted returns. Renowned ETF experts at Astoria Portfolio Advisors manage PPI by investing where the opportunities are: cyclical stocks (such as natural resources, energy, industrials and materials), commodities and TIPS. The fund charges 76 bps in fees and yields 3.24% annually.

Fidelity Stocks For Inflation ETF (FCPI)

The underlying Fidelity Stocks for Inflation Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies with attractive valuations, high quality profiles and positive momentum signals, emphasizing industries that tend to outperform in inflationary environments. The fund charges 29 bps in fees.

Quadratic Interest Rate Volatility And Inflation Hedge ETF (IVOL)

The Quadratic Interest Rate Volatility and Inflation Hedge ETF is actively managed and seeks to achieve its investment objective primarily by investing, directly or indirectly, in a mix of U.S. Treasury Inflation-Protected Securities and long options tied to the shape of the U.S. interest rate curve. The expense ratio of the fund is 1.03%.