Annual inflation rate in the United States slowed to 8.3% in April from a 41-year high of 8.5% in March, per tradingeconomics, but less than market forecasts of 8.1%. Energy prices surged 30.3%, below 32% in March thanks to a moderate rise in gasoline prices (43.6% versus 48%) while fuel oil increased more (80.5% versus 70.1%). On the other hand, food prices jumped 9.4%, the maximum since April 1981 and prices also rose faster for shelter (5.1% vs 5%) and new vehicles (13.2% vs 12.5%).
Against this backdrop, we suggest a few sector ETFs that can be worth investing at the time of rising inflation. Below we highlight those.
Transportation Services
The index for transportation increased 3.1% in April after a 2% uptick in March.
Auto
The price inflation of new cars has been palpable. The index for new vehicles increased 1.1% in April after rising 0.2% the previous month. First Trust S-Network Future Vehicles & Technology ETF CARZ can thus be played on the uptick in car price inflation.
The Zacks Rank #3 (Hold) First Trust SNetwork Future Vehicles & Technology ETF (CARZ) follows the S-Network Electric & Future Vehicle Ecosystem Index, which constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
Utilities
The index for utility gas service increased 3.1% in April after a rise of 0.6% in March.
Utilities Select Sector SPDR ETF XLU – The underlying index seeks to provide an effective representation of the Utilities sector of the S&P 500 Index.
Restaurants
The food away from home index rose 0.6% sequentially in April after rising 0.3% in March. This points to the fact that restaurants are charging higher.
AdvisorShares Restaurant ETF EATZ – The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business.
Medical Care Services
The medical care index rose 0.5% sequentially in April after an uptick of…
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