Inflation can persist even when price pressures begin to cool. Housing-related costs, utility bills and essential environmental services can remain expensive, giving some companies the ability to pass higher operating costs on to customers. Three exchange-traded funds — EVX, IYR and VPU — offer exposure to businesses operating in these areas.
The first is the VanEck Environmental Services ETF (EVX), which invests in companies involved in waste management, recycling and environmental services. Demand for waste collection and treatment is tied to ongoing commercial and household activity, although regulation, labour costs and capital spending can affect profitability.
The second is the iShares U.S. Real Estate ETF (IYR), which provides exposure to listed U.S. real estate investment trusts and other property companies. Its portfolio spans property categories including healthcare facilities, industrial buildings, residential real estate and data centres. Some landlords can raise rents over time, but lease structures, vacancies, refinancing costs and property valuations influence how much inflation they can pass through.
The third is the Vanguard Utilities ETF (VPU), which tracks U.S. utility companies. Regulated electricity and gas providers may be able to recover certain costs through approved rates, while long-term demand for essential services can support relatively predictable revenue. However, regulatory decisions, borrowing costs and the substantial investment required to maintain energy infrastructure remain important risks.
These funds are not direct inflation-protection instruments. They hold equities, and their prices can fall even when consumer prices rise. Higher interest rates may weigh on real estate and utilities in particular, while environmental-services companies face their own operational and regulatory challenges.
Investors should compare expense ratios, holdings, valuations and regional exposure before making a decision. The funds are U.S.-listed products, so European retail investors should also check availability and applicable product-disclosure requirements with their broker.
The broader lesson is that companies with pricing power may be better positioned to navigate persistent inflation — but that does not make their shares a guaranteed hedge. Sector concentration and market valuations can matter just as much as the inflation outlook.
Sources
- Investing.com / MarketBeat — These 3 ETFs Could Benefit From the Parts of Inflation That Won’t Go Away
- VanEck — Environmental Services ETF (EVX)
- iShares — U.S. Real Estate ETF (IYR)
- Vanguard — Utilities ETF (VPU)
