5 ASX ETFs to combat inflation: fund manager

The fund manager BetaShares believes certain ETFs can provide resilience.

a group of business people in business attire join their hands in the middle of a circle in a team celebration as they smile broadly in celebration of a milestone event.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • BetaShares suggests five ETFs that it believes can protect investors against inflation
  • Commodities are one area of potential protection
  • The global banking sector could benefit from rising interest rates

The fund management business BetaShares has come out with some suggestions for exchange-traded funds (ETFs) that could protect against inflation.

BetaShares chief economist David Bassanese notes there has been a shift in global interest rate expectations since last year, with interest rates in the United States now expected to reach 1.9% by the end of the year and 2.8% by the end of 2023.

With global inflation spurred on by the Russian invasion of Ukraine, Mr Bassanese has pointed to some ASX ETFs in the commodities sector that may be of interest to investors in this inflationary environment.

Commodity ETFs

The four ETFs that BetaShares refer to relate to global energy, gold and food producers, and Australian resource companies.

They include:

  • BetaShares Global Energy Companies ETF (ASX: FUEL)
  • BetaShares Australian Resources Sector ETF (ASX: QRE)
  • BetaShares Global Gold Miners ETF (ASX: MNRS)
  • BetaShares Global Agriculture Companies ETF (ASX: FOOD)

Mr Bassanese said these ETFs had been performing thanks to the strength of oil, gold, food, and iron ore prices. More broadly, many commodity shares were performing well.

BetaShares said that valuations were "still attractive" when looking at price to earnings (p/e) ratios compared to long-run averages.

However, commodities aren't the only industry that BetaShares said could benefit in the current environment.

Global banking ETF

The other high-performance area was the global banking sector.

Mr Bassanese said that the banking sector "tended to do relatively well in an environment of rising interest rates", referring to the BetaShares Global Banks ETF (ASX: BNKS) for these inflationary times.

The BetaShares chief economist said:

This is because rising rates tend to be associated with stronger profits margins as medium-term bank lending rates tend to widen by more than the cost of short-term funding costs. Rising credit demand due to strong economic growth also tends to be supportive of global banks.

Mr Bassanese wrote that the same attractive valuation argument was also broadly held for the financial sector.

Australian interest rates to increase?

Mr Bassanese said that he expected Australian interest rates to rise by 15 basis points next week, which is early May 2022. He said it made sense for the RBA to "start off slow", with another 25 basis point increase expected in June.

Interest rates are being increased by several central banks around the world, including the US Federal Reserve.

Should you invest $1,000 in Betashares Global Banks Etf - Currency Hedged right now?

Before you buy Betashares Global Banks Etf - Currency Hedged shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Betashares Global Banks Etf - Currency Hedged wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended BetaShares Global Banks ETF - Currency Hedged and BetaShares Global Energy Companies ETF - Currency Hedged. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ETFs

A man points at a paper as he holds an alarm clock.
ETFs

I would buy and hold these quality ASX ETFs for a decade or more

Here's why these funds could be quality long term picks for investors.

Read more »

A happy young couple lie on a wooden deck using a skateboard for a pillow.
ETFs

5 fantastic ASX ETFs to buy for easy investing

Looking for an easy way to invest? Here are five funds to consider buying.

Read more »

A woman relaxes on a yellow couch with a book and cuppa, and looks pensively away as she contemplates the joy of earning passive income.
ETFs

3 ASX ETFs to buy for passive income in May

Don't like stock picking but want passive income? Here are three funds that could help you.

Read more »

Happy man holding Australian dollar notes, representing dividends.
ETFs

How to turn $500 a month into $250,000 with ASX ETFs

This is the easy way to build wealth. Let's see how it works.

Read more »

ETF spelt out with a rising green arrow.
ETFs

Invest $500 into these fantastic ASX ETFs

These funds could be great picks for investors with money to invest in the share market this month.

Read more »

A group of office workers pump the air to celebrate
ETFs

Why VanEck Australian Equal Weight ETF could be a top performing ASX ETF in 2025

This ETF could be primed for a particularly successful 2025.

Read more »

woman talking on the phone and giving financial advice whilst analysing the stock market on the computer with a pen
ETFs

2 under the radar ASX ETFs that are up more than 100% over 5 years

It might be worth adding these two ETFs to your radar.

Read more »

a business person checks his mobile phone outside a Wall Street office with an American flag and other business people in the background.
ETFs

The pros and cons of buying BetaShares NASDAQ 100 ETF (NDQ) units this month

Is this the right time to invest in US stocks?

Read more »