This week marks the launch of two new exchange traded funds, both of which intend to offer investors a direct hedge against inflation. IndexIQ introduced the IQ CPI Inflation Hedged ETF (NYSE: CPI) and also introduced the IQ ARB Global Resources ETF (NYSE: GRES).
Investors generally need to seek investment returns that outpace inflation if they want to be up net-net throughout their lives. That being said, it will be interesting to see how these measure through time. In theory, these could offer Joe Public more hedging instruments for or against other investments used to beat the eroding factor of inflation down the road. One of these ETF products, the CPI trade, is very easy to factor in the moves. The other, the GRES trade, is likely to be more complex than what many retail investors may care about; and what many institutions may aim to achieve on their own.
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