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Current DateTime: 04:52:04 12 Nov 2009
LinksList Documentid: 30328029
Fight Inflation with These ETFs: Expert
Published: Thursday, 11 Jun 2009 | 2:58 PM ET
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By: JeeYeon Park
CNBC News Associate

ETFs provide a low-cost, tax efficient way to invest in an inflationary environment, said Manisha Thakor, personal finance expert and co-author of “On My Own Two Feet.”

“Nobody knows for sure if inflation is coming but the odds are pretty high with trillion dollar deficits,” Thakor told CNBC. She said even small increases in inflation have a massive impact on investors’ purchasing power down the road.

“We’re talking about taking a small portion of your portfolio and trying to allocate it to sectors such as materials or energy that historically have done well when inflation has been present,” she said.

Recommendations:

Vanguard Materials ETF [VAW  Loading...      ()   ]—"When you start to see GDP growth start to slow down in the developing markets, that’s a trigger that you want to start lightening up on the materials side," said Thakor.

Vanguard Energy ETF  [VDE  Loading...      ()   ]—"These are going to benefit if we have a continuing recovery—we have a massive supply/demand imbalance and haven’t had a meaningful investment in the energy/infrastructure for years so energy ETFs could be a long-term holding for you," she said.

iShares Barclays TIPS Bond [TIP  Loading...      ()   ]—This is more conservative side of your portfolio, advised Thakor. Consider investing here if your risk appetite is not as large. 

Disclosure:

No immediate information was available for Thakor.

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