Using ETFs To Hedge Inflation Risk

Using ETFs To Hedge Inflation Risk

For much of 2021, inflation has been the bogeyman in the shadows, lurking in the background and spooking some equity and bond ETFs throughout the year.

But October’s CPI reading is the latest sign that this threat to market stability is growing. Consumer prices jumped 6.2% from the year prior, hitting a three-decade high.

Inflation could be particularly disastrous to portfolios as it tightens the correlation between equity and fixed income assets closer together at exactly the wrong time.