By Paul R. La Monica
Inflation, much like a serial killer in a cheesy horror movie, isn't dead yet. It just keeps coming back, as Tuesday's higher-than-expected consumer price index (CPI) reading suggested price pressures remain persistent.
The broader market tumbled on the news. But there are some funds that own companies, particularly those tied to oil and other commodities, which are benefiting from sticky inflation.
Take a look at the Horizon Kinetics Inflation Beneficiaries exchange-traded fund, for example. The ETF has big holdings in silver miner Wheaton Precious Metals and uranium company Cameco, as well as Landbridge and Texas Pacific Land, which own land in the oil-rich Permian Basin. It is up 20% so far in 2026 versus a gain of 7.7% for the S&P 500.
The spike in crude oil prices due to the war in Iran is one reason why this fund, and others like it, have done well.
The Avantis Inflation Focused Equity ETF, which owns Exxon Mobil, Chevron and Berkshire Hathaway as top holdings, is up 11.5% this year. (Berkshire, among many other things, owns a giant energy business.) The Fidelity Stocks for Inflation ETF is up more than 8% in 2026; oil company APA, energy services firm TechnipFMC and natural gas producer CNX Resources are among its largest positions.
Two other ETFs with exposure to sectors that are inflation beneficiaries -- the iShares U.S. Infrastructure ETF and VanEck Real Assets ETF -- are up 17% and 22% respectively as well.
But can commodity prices continue to climb? Oil prices remain elevated for now. That could change quickly if there is a lasting end to the war in Iran.
"It's too late to be chasing energy stocks," said Jeff Muhlenkamp, portfolio manager of the Muhlenkamp Fund in an interview with Barron's. "If you hadn't had the war in Iran, oil prices would be doing nothing."
Muhlenkamp said that he does own oil services giant SLB, which could benefit once the Strait of Hormuz opens since there will likely be a need to repair damaged energy infrastructure. He also has a position in natural gas producer EQT. But other than that, he's wary of the sector.
Others argue that commodity prices, especially oil, will remain stubbornly high. Goldman Sachs economist Manuel Abecasis said in a report Monday that "we also expect higher oil prices to boost core inflation meaningfully over the next year."
And managers for the Horizon Kinetics fund are optimistic that demand for metals, land and other real assets will continue to rise. Copper, for example, is back near a record high. The main reason? You guessed it: artificial intelligence.
"There is also the non-trivial fact that front-loaded AI capital spending requires vast quantities of tangible assets -- including land, water, gas, oil, uranium, metals, aggregates, and specialty chemicals that are inputs for end applications. Among them: power plants and transmission systems, data centers, cooling equipment, and networking systems," the fund's managers wrote in their annual shareholder letter in March.
James Davolos, lead portfolio manager for the INFL ETF, added in an e-mail to Barron's that the firm expects "this strategy to continue to preserve capital, while maintaining exposure to the upside."
And even though many of the fund's holdings have risen sharply this year, the ETF's valuation doesn't look stretched. INFL now trades for about 24 times forward earnings estimates, below the all-time high of 33 from late February just as the Iran conflict began.
That's largely due to the fact that earnings estimates continue to climb as analysts bet on bigger profits for many of the fund's holdings. The consensus 2026 earnings per share estimate for INFL is 14% higher than where it was at the end of February.
The issue for investors is that many of these inflation beneficiaries now depend on commodity prices staying elevated. If oil, copper and other real assets start to tumble, earnings estimates -- and the ETFs built around them -- could quickly follow.
Write to Paul R. La Monica at paul.lamonica@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 12, 2026 14:43 ET (18:43 GMT)
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