ETF of the week: Horizon Kinetics Inflation Beneficiaries ETF (INFL)
ETF Trends CEO Tom Lydon discussed the Horizon Kinetics Inflation Earnings ETF (INFL) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.
INFL is an actively managed ETF that seeks long-term capital growth in real (inflation-adjusted) terms. It seeks to achieve its investment objective by investing primarily in domestic and foreign equity securities of companies that are expected to benefit, directly or indirectly, from the rise in the prices of real assets (i.e. assets whose value is mainly derived from physical properties such as commodities) such as those whose incomes are expected to increase with inflation without a corresponding increase in expenses.
Worried about inflation? This ETF is for you. INFL is an ETF strategy to deal with growing concerns about inflation. INFL will own shares and invest in the capital of currently profitable and well-managed companies. It avoids the typical industry focus on traditional investment categories and attempts to find unique, undiscovered, and long-term drivers of value and price appreciation.
With that in mind, these businesses don’t need inflation to be successful. These light asset companies have the ability to profitably support low inflation for long periods of time, which increases asset values ââand economic returns. An example of light assets today is the intercontinental exchange [ICE]. Founded 20 years ago as a digital exchange, trading Brent crude oil futures, and now a global powerhouse in financial trading, clearing and data.
However, they should profit from inflation. The portfolio is designed to provide full cycle inflation exposure and seeks to thrive under many different inflation scenarios. INFL focuses on companies that have exposure to inflationary underlying assets but are not very capital intensive. This is a key feature that differentiates INFL from other products intended to hedge against inflation.
Federal Reserve Chairman Jerome Powell, testifying before the Senate Banking Committee, said inflation would likely remain high for the next several months before moderating. Treasury Secretary Janet Yellen told CNBC she expects the US economy to experience “several months of rapid inflation.”
Listen to the full episode of the INFL podcast:
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