Because rising inflation, together with other factors, could keep the stock market under pressure in the near term, we think it could be wise to bet on ETFs that are exposed to industries that are less susceptible to market volatility. To that end, we believe the following ETFs, Energy , Select Sector SPDR Fund (XLE (NYSE:XLE)), VanEck Vectors Gold Miners ETF (NYSE:GDX), and Consumer Staples Select Sector SPDR Fund (XLP), could be solid bets now. So please read on for a more detailed explanation.Even though strong second-quarter corporate earnings reports have been helping the major stock market indexes hover near their all-time highs, rising inflation and a resurgence of COVID-19 cases continue to worry investors.
According to the Labor Department data, the consumer price index (CPI) rose 5.4% in July, in line with June’s figure and representing the largest jump since August 2008. Furthermore, the International Monetary Fund (IMF) has warned that inflation could be persistent. But while high inflation poses a major threat for some industries, several industries are less susceptible to its consequences.
Therefore, we think it could be wise to invest in quality ETFs Energy Select Sector SPDR Fund (XLE), VanEck Vectors Gold Miners ETF (GDX), and Consumer Staples Select Sector SPDR Fund (XLP). They are less susceptible to the consequences of high inflation.