“Reflation” bidding resumes.
Travel and leisure promotions this month intensified with exchange-traded funds such as ETF for dynamic leisure and entertainment Invesco (PEJ), Art US Global Jets ETF (JET) and AdvisorShares’ Hotel ETF (BEDZ) everything is moving sharply higher.
The action is as much about diversification as the upcoming warm weather and mitigation of Covid-19 restrictionssaid ETF Trends CEO Tom Leiden to CNBC “ETF Edge” this week.
“We see rising interest rates and the threat of rising interest rates here in the U.S., but abroad, not all developed countries are suffering from that threat, ”Leiden said in an interview Monday.
“People are diversifying into areas like emerging markets, where it’s not only an opportunity to get better returns, but you’re not in danger of central banks being the same hawks in the United States,” he said.
Another way to diversify is to invest in inflation hedging tools such as the AXS Astoria Inflation Sensitive ETF (PPI), said in the same interview the founder and CEO of Astoria Portfolio Advisors John Davy.
“As a rule, after a recession you get this wave higher in price, cyclicality, inflation-sensitive stocks, so about a year and a half ago we put together an official portfolio of inflation-sensitive models,” said Davy, who is also his main investment. firms. PPI employee and portfolio manager.
The ETF owns mainly banking, energy, industrial and inventory, which are the four most efficient sectors after the recession, Davy said. Ticker is a nod to what is widely followed Producer price indexUS government wholesale price sensor.
Given rising prices, investors and advisers should allocate 5-10% of their portfolios to inflation-oriented products such as Davi’s, he said.
“The CPI is 7%. When I look around the world, I see that inflation is over 15%, even higher when I look at the cost of goods and groceries and housing prices,” Davy said. “If I were a financial advisor, would I really look at your portfolio and say what can you do on margins to insure against inflation?”
The CPI has grown by almost 5% since the beginning of the year.