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Amid Stagflation Worries, Merk Launches ETF Tracking Solactive Index

The term stagflation has recently gained a lot of press, as the market has been fearing surging inflation, falling employment, and slowing or negative economic growth in the last months. Amid the possibility that world economies face this challenge, Merk launches the Merk Stagflation ETF (STGF), which seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Solactive Stagflation Index (SOLSTAGF).

The index pursues to track the performance of components that are expected to benefit, either directly or indirectly, from persistent inflation, including in an environment of weak economic growth (stagflation), such as U.S. Treasury Inflation-Protected Securities, real estate, gold, and oil. 

Timo Pfeiffer, Chief Markets Officer at Solactive, commented: “We are pleased that Merk has chosen us as the index provider for such an important and innovative product geared towards times of uncertainty. This ETF offers the possibility for investors to hedge their portfolios allocating their assets in industries like gold, oil, and real estate, which can protect them during periods of slow growth.”

Axel Merk, President and Chief Investment Officer of Merk Investments, stated: “The Merk Stagflation ETF (STGF) is designed to provide appreciation potential and inflation-sensitive income in an environment of stagflation like that of the 1970s — characterized by high inflation rates, a bull market in commodities, and rising real estate prices. The strategy holds a basket of exposures across three asset classes: inflation-protected bonds, commodities, and real estate.”

Nick Reece, Vice President of Merk Investments, said: “STGF is the first stagflation-themed ETF in the market. We think it will be embraced by advisors and retail investors concerned about inflation and about the outlook for traditional 60/40 portfolios more broadly — and that might be looking for an alternative to traditional fixed-income allocations.”