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 – Get Rating), VanEck Vectors Gold Miners ETF (GDX – Get Rating), and Consumer Staples Select Sector SPDR Fund (XLP – Get Rating). They are less susceptible to the consequences of high inflation.
Energy Select Sector SPDR Fund (XLE – Get Rating)
Managed by the SSGA Funds Management, Inc., XLE invests in companies that operate across energy sectors. It also invests in the growth and value stocks of companies across market capitalization levels. In addition, it seeks to track the performance of the Energy Select Sector Index and the S&P 500 Index.
With $22.15 billion in AUM, XLE’s top holding is Exxon Mobil Corporation (XOM), which has a 23.55% weighting in the fund, followed by Chevron Corporation (CVX) at 21.62% and ConocoPhillips (COP) at 4.68%. It has a 0.12% expense ratio of 0.12%, which is lower than the 0.47% category average.
XLE pays a $2.11 annual dividend, which yields 4.40% at the fund’s prevailing share price. The ETF’s average four-year dividend yield stands at 5.34%. XLE has gained 26.4% in price over the past year and 31.6% over the past nine months.
XLE’s POWR Ratings are consistent with its growth outlook. It has a B grade for Peer. Get XLE’s Buy & Hold and Trade rating here.
XLE is ranked #8 of 44 ETFs in the Energy Equities ETFs group.
VanEck Vectors Gold Miners ETF (GDX – Get Rating)
GDX offers investors exposure to some of the largest gold mining companies in the world, and typically invests at least 80% of its assets in the common stocks and depositary receipts of companies in the gold mining industry. In addition…
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