The Merk Stagflation ETF (ticker STGF), which launches Wednesday, tracks a portfolio divided between 55%-85% U.S. Treasury Inflation-Protected Securities and between 5%-15% real estate, gold and oil. The ETF charges a 0.45% expense ratio and will rebalance as needed to keep those weightings.
Trading in STGF kicks off hours before the Fed is widely expected to raise interest rates by 50 basis points — the biggest move since 2000 — with at least two more supersized hikes priced in this year. While the hottest inflation prints in four decades fueled the Fed’s hawkish pivot, it’s a difficult needle to thread as the pace of growth cools and recession warnings ring louder. That’s fanned fears about stagflation — a toxic mix of rising costs, falling employment and slow growth — though the labor market remains hot and the American consumer has been resilient.
While the launch is well-timed, ETF Think Tank’s Cinthia Murphy questioned why it doesn’t have a higher weighting to commodities.