Inflation Fighter

Moderate Macro Theme

Real assets, commodities, and TIPS — the things that tend to hold value when the dollar doesn't. Built for environments where CPI stays sticky above the Fed's target.

5
ETFs
2.5%
Aggregate Yield
$7.1B
Wtd Avg AUM

Holdings

Symbol Name Weight Price 1D 3M YTD Yield AUM
TIP iShares TIPS Bond ETF 25% $111.02 ... ... ... 2.8% $14.0B
AAAU Goldman Sachs Physical Gold ETF Shares 20% $46.94 ... ... ... — $2.9B
PDBC Invesco Actively Managed Exch-Traded Commodity Fd Tr Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF 15% $16.98 ... ... ... 3.0% $6.4B
VNQ VNQ 20% ... ... ... ... — —
VDE Vanguard Energy ETF 20% $161.79 ... ... ... 2.4% $10.1B

Investment Thesis

Inflation erodes the purchasing power of cash and nominal bonds. This portfolio defends against that by owning assets whose values are either explicitly linked to inflation (TIPS) or tend to appreciate when prices rise (commodities, real estate, energy stocks, gold). TIPS adjust their principal value with CPI, providing a guaranteed real return. Gold has been a store of value for millennia and tends to appreciate during periods of monetary debasement. Commodities are literally the raw materials whose prices define inflation. REITs benefit because rents and property values tend to rise with inflation. Energy stocks benefit because higher oil and gas prices are themselves a major inflation driver. Together, these assets create a portfolio that should at minimum preserve purchasing power and potentially profit when inflation exceeds expectations.

Portfolio Construction

TIP iShares TIPS Bond ETF
25%
Treasury Inflation-Protected Securities — US government bonds whose principal adjusts with CPI. The most direct inflation hedge available, with the full faith and credit of the US Treasury.
Yield: 2.8% AUM: $14.0B
AAAU Goldman Sachs Physical Gold ETF Shares
20%
Gold as a monetary debasement hedge — physical gold backed in vaults. Central banks have been net buyers since 2010, and fiscal deficits globally are creating more demand for hard money alternatives.
AUM: $2.9B
PDBC Invesco Actively Managed Exch-Traded Commodity Fd Tr Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF
15%
Broad commodities basket — oil, natural gas, agriculture, and metals. Commodities are the raw inputs of inflation itself, making this the most direct inflation exposure.
Yield: 3.0% AUM: $6.4B
VNQ VNQ
20%
Real estate — real assets with income. Property values and rents tend to rise with inflation, and REITs are required to distribute 90% of income to shareholders.
VDE Vanguard Energy ETF
20%
Energy stocks benefit from higher oil — when energy prices drive inflation, energy companies see earnings surge. They also pay meaningful dividends from their cash flows.
Yield: 2.4% AUM: $10.1B

Key Considerations

  • If inflation falls back to 2%, this portfolio will likely underperform a traditional 60/40
  • Commodities can be extremely volatile and have negative roll yield over long periods
  • TIPS have negative real yields when inflation expectations are high
  • This is a macro bet — getting the inflation call wrong means years of underperformance
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