3 ETFs to Own After Inflation Hits a 30-Year High

Canadians worried about high inflation should seek out ETFs like iShares S&P/TSX Global Gold Index ETF (TSX:XGD) today.

| More on:
ETF chart stocks

Image source: Getty Images

The rate of inflation in Canada rose to 4.8% in December 2021, according to a recently released report from Statistics Canada. This was the inflation rate has reached since 1991. That has put more pressure on the Bank of Canada (BoC) to act on its interest rate decision early in 2022. However, there is no guarantee that rate hikes will have the immediate impact on inflation that policymakers hope. In this environment, investors should be prepared for anything. Today, I want to look at three exchange-traded funds (ETFs) that are worth owning in this inflationary climate.

Should you seek exposure to gold as inflation climbs?

Last summer, inflation was already well on the rise. At the time, I’d suggested that investors look to gold as one of several options. Indeed, the spot price of gold was holding steady as markets were being throttled in early afternoon trading on January 24.

iShares S&P/TSX Global Gold ETF (TSX:XGD) is one ETF investors may want to consider if they are looking for exposure to the gold space. Shares of this ETF have dropped 9.3% in the year-over-year period. This fund seeks to replicate the performance of the S&P/TSX Global Gold Index.

Some of the top holdings in this ETF include the top gold miners in the world. Newmont tops out the list, along with familiar names like Barrick, Franco Nevada, and Kirkland Lake Gold. Gold stocks still look undervalued after suffering through a rough 2021. It is not too late to jump on this ETF in late January.

Here’s why this emerging markets ETF could be a good bet right now

Emerging markets are another solid option for investors looking for alternatives right now. Indeed, Asia-based markets have put together a solid performance in comparison to here in North America. It may be worth dipping into this space during this period of uncertainty.

BMO MSCI Emerging Markets ETF (TSX:ZEM) aims to capture large and mid-cap representation across 26 emerging markets countries. Shares of this ETF have plunged 15% in the year-over-year period.

Investors can expect exposure to top international companies like Tencent, Alibaba, and Reliance Industries in this fund.

One more dividend-oriented ETF to snatch up today

Sometimes it is best to seek out the most practical solution during periods of uncertainty. That means targeting dependable income-yielding equities. iShares Canadian Select Dividend ETF (TSX:XDV) is one of the most attractive ETFs that offer exposure to these high-quality equities.

Shares of this ETF have climbed 22% year over year at the time of this writing. However, the fund has dropped 1.9% to open 2022. This fund offers diversified exposure to 30 of the highest-yielding Canadian companies in the Dow Jones Canada Total Market Index. Moreover, holders can count on monthly dividend income.

The top holdings in this fund include big banks like CIBC, Bank of Montreal, as well as telecom and energy giants like BCE and TC Energy. This ETF aims to pay out a monthly dividend of $0.103 in January, which represents a 3.5% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Tencent Holdings.

More on Investing

Cogs turning against each other
Dividend Stocks

1 Passive-Income Stock to Counter Volatility

Looking for a stock that can counter volatility now and tomorrow? This stock is a reliable option for growth and…

Read more »

edit Real Estate Investment Trust REIT on double exsposure business background.
Dividend Stocks

A Top REIT for High-Yielding Income

This top REIT on the TSX offers investors a considerable amount in shareholder dividends through its massive dividend yield.

Read more »

edit Four girl friends withdrawing money from credit card at ATM
Bank Stocks

Should You Buy Canadian Bank Stocks in the Face of a Potential Recession?

Royal Bank of Canada (TSX:RY)(NYSE:RY) stock a is a great blue-chip name that investors should not hesitate to buy on…

Read more »

analyze data
Metals and Mining Stocks

3 Under-the-Radar Commodity Stocks to Buy

Three commodity stocks are likely to break out soon if inventories in metals markets continue to decline or demand outpaces…

Read more »

Oil pumps against sunset
Energy Stocks

Is it a Good Time to Buy in the Energy Sector?

Boosted by a very bullish supply/demand environment, energy stocks like Canadian Natural Resources and Tourmaline have much further to go.

Read more »


2 Stocks to Buy Offering Better Value Than Air Canada

Air Canada has been a popular stock for years, but despite its low price, these two picks are much better…

Read more »

money cash dividends

How to Make $373/Month in Passive Income With These 2 TSX Stocks

You could bring in passive income of $4,482 annually, or $373 per month!

Read more »

clock time
Stocks for Beginners

3 Stocks to Start Investing Today

Looking for a set of stocks to start investing today? Here are some great options that offer growth and income…

Read more »