10 Best Inflation-Fighting ETFs for Higher Costs

Looking to protect your portfolio from higher prices? Consider these top funds to hedge against inflation.

Green arrow rising with grocery store in backdrop
(Image credit: Getty Images)

Inflation continues to be top of mind for investors, with costs for energy, food and other products hovering near levels not seen in 40 years. This has investors seeking out ways to protect their portfolio against higher prices – either with individual equities or inflation exchange-trade funds (ETFs).

And this trend is likely to continue in the near term considering expectations are for inflation to remain red-hot for the foreseeable future – with higher prices only exacerbated by Russia's war in Ukraine.

Rising prices are burdensome on many people, from low-income consumers without much wiggle room in family budgets to small business owners trying to keep down input costs to turn a profit. Higher costs are also troublesome for investors who now must see returns that can match this increase if they want to protect their nest egg.

Think of it this way: If you're only seeing 1% or 2% gains a year on your investments but your food and housing prices are rising 5%, your purchasing power is steadily reduced if the nominal value of your portfolio is moving higher.

In prior years, 5% or 7% returns weren't difficult to come by in the stock market. But with volatility in the S&P 500 and many top stocks in the red for the year-to-date in 2022, investors are looking seriously at alternatives that can help them bust inflation to both protect their nest egg and keep their portfolio growing.

Here are 10 of the best inflation ETFs available to investors today. The funds featured here offer different ways to position your portfolio in an inflationary environment, including via commodity futures, companies with pricing power or Treasury Inflation-Protected Securities (TIPS). Given the variety of funds for inflation, there's likely an option here that will align with your goal to combat higher costs.

Data is as of March 28. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Jeff Reeves
Contributing Writer, Kiplinger.com

Jeff Reeves has covered finance and capital markets since 2008, contributing to outlets including CNBC, the Fox Business Network, the Wall Street Journal digital network, USA Today, US News & World Report and CNN Money.