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ETF roundup: A protection against inflation

05/12/2021 | 10:52am EDT

There's a tracker which can help investors position themselves on the megatrend of the ageing population. Let's also look at an ETF that can protect against inflation.

 

 

The health megatrend in an ETF

This ETF allows you to play a megatrend, i.e. an underlying trend that is shaping our world over the long term. The ageing of the population is a trend that has been present since the improvements in hygiene and medicine since the industrial era of the 19th century. This trend in developed countries is likely to favour companies in the healthcare sector. The Lyxor STOXX Europe 600 Healthcare ETF (HLT - LU1834986900) replicates the STOXX Europe 600 Health Care Net Return Index, one of the 18 supersectors that exist, which is composed of the health care companies of the 600 largest European capitalisations. This ETF lets you play a defensive sector in this slightly euphoric period, which will cushion your portfolio in the event of a market decline. However, it is heavily concentrated on the first 10 positions, which represent 70% of the tracker. Its low year-on-year growth in this bullish market has allowed the companies in it to generate slight earnings growth without seeing their share price rise too much. A boon for long-term investors who want to invest in this megatrend. With reasonable fees of 0.3% and assets under management of €363 million.

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Source: Lyxor An

ETF to protect against inflation

Inflation is taking center-stage lately. As you can see in the chart below, Bank Of America has tracked the number of times the word inflation has been mentioned in conversations. The mentions have exploded by over 300% since 2003. Despite rising commodity prices putting inflationary pressure on prices, the Fed is maintaining its current monetary policy. The U.S. central bank believes that this inflationary episode is only temporary, and that inflation should eventually return to levels close to 2%. However, others believe that prices will return in the long term, and that the level is actually higher than calculated. Shoumld you need to protect some of your capital from inflation, we suggest you look at the iShares TIPS Bond ETF. It seeks to replicate the returns of US Treasury bonds indexed to inflation. Over 3 years, the tracker has achieved a total return of 20.2%, i.e. an annualised return of 6.26%.

Number of mentions of the word "inflation

ETF performance over 3 years, Source: TrackInsight

 


ę MarketScreener.com 2021
Stocks mentioned in the article
ChangeLast1st jan.
ALIBABA GROUP HOLDING LIMITED 1.09% 213.94 Delayed Quote.-8.07%
AMUNDI 0.00% 74.95 Real-time Quote.12.20%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.07% 0.77072 Delayed Quote.0.17%
BANK OF AMERICA CORPORATION -1.19% 41.36 Delayed Quote.36.46%
BRITISH POUND / US DOLLAR (GBP/USD) 0.01% 1.41122 Delayed Quote.3.23%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.02% 0.82352 Delayed Quote.4.69%
DOW JONES AFRICA TITANS 50 INDEX -0.03% 548.78 Delayed Quote.3.71%
EURO / US DOLLAR (EUR/USD) 0.03% 1.2123 Delayed Quote.-0.86%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.04% 0.01366 Delayed Quote.-0.28%
MEITUAN 3.09% 307.2 End-of-day quote.4.28%
MSCI TAIWAN (STRD) 0.00% 710.15 Real-time Quote.18.18%
NASPERS LIMITED 0.83% 2990 End-of-day quote.-0.97%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.15% 0.71515 Delayed Quote.-0.58%
S&P AFRICA 40 INDEX 0.02% 178.88 Delayed Quote.3.69%
SAMSUNG ELECTRONICS CO., LTD. -0.62% 80500 End-of-day quote.-0.62%
STOXX EUROPE 600 0.18% 458.32 Delayed Quote.14.66%
STOXX EUROPE 600 NR 0.18% 1024.41 Delayed Quote.16.26%
TENCENT HOLDINGS LIMITED -0.75% 596 End-of-day quote.5.67%
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