10 Best ETFs for Stagflation

10 Best ETFs for Stagflation

These ETFs can outperform during periods of stagnant economic growth and high inflation.

Research Lead
Reviewed by: etf.com Staff
Edited by: Ron Day

First-quarter growth fell more than expected, rising at an annualized rate of 1.6%, according to the Bureau of Economic Analysis. That’s a slower growth rate than the forecast of 2.5%, and much lower than the 3.4% increase achieved in the fourth quarter.

Combine that with three months of inflation reports above consensus estimates, and you get two of the key ingredients of stagflation.

Fortunately, there are some exchange-traded funds that may offer potential hedges or opportunities during stagflation.  

In this article, we provide insight into how to navigate this environment with what have traditionally been considered the best ETFs for stagflation.

What Is Stagflation?

Stagflation is an economic environment that combines stagnant economic growth with high inflation. Imagine an economy stuck in neutral, where prices for goods and services are high and rising but businesses aren't expanding, and unemployment remains stubbornly high. This creates a double whammy for consumers, as their purchasing power shrinks while job opportunities dwindle.

In 2024, the only missing ingredient for full on stagflation is high unemployment, but investors are wise to educate themselves on the best types of investments to buy and hold in this challenging environment.

What Are the Best ETFs for Stagflation?

There isn't a guaranteed perfect ETF for stagflation, because stagflation is a complex economic condition with a combination of high inflation and stagnant economic growth. However, there are some types of ETFs that might perform better than others during stagflation. Here are a few to consider:

Commodity ETFs

During stagflation, commodities may perform well as they tend to retain value during periods of high inflation. Consider ETFs that track the prices of commodities such as gold, silver, oil, and agricultural products. Examples include:

Short-Term Treasury Bond ETFs

Short-term treasury ETFs can provide relative safety and liquidity during stagflation. While they may not offer high returns, they can help preserve capital in uncertain economic environments by providing high relative yields with low interest-rate sensitivity. Examples include:

Defensive Sector ETFs

Defensive sectors like consumer staples, healthcare, and utilities are generally considered good investments for stagflation. These sectors provide essential goods and services that people need regardless of economic conditions. Even during periods of high inflation and stagnant growth, people will still need electricity, healthcare, and basic consumer products. Examples include:

10 Best ETFs for Stagflation

TickerFundExpense RatioAUM1-Yr Return
GLDSPDR Gold Shares0.40%$62.2B17.26%
SLViShares Silver Trust0.50%$11.8B9.02%
USOUnited States Oil0.60%$1.4B23.00%
DBAInvesco DB Agriculture0.85%$848.6M29.54%
SHViShares Short Treasury Bond ETF0.15%$18.7B5.20%
VGSHVanguard Short Term Treasury ETF0.04%$19.3B2.18%
SGOViShares 0-3 Month Treasury Bond ETF0.07%$20.3B5.44%
XLVHealth Care Select Sector SPDR ETF0.09%$37.8B8.01%
XLUUtilities Select Sector SPDR ETF0.09%$11.9B0.30%
XLPConsumer Staples Select Sector SPDR ETF0.09%$14.3B2.11%

Data as of April 26, 2024. See also: Short-Term Treasury ETFs: A Guide for Investors

Bottom Line on ETFs for Stagflation in 2024

While there is no single best ETF to buy for stagflation, there are a number of ETF types that tend to outperform the broader market averages during stagflation. These include commodity ETFs, short-term Treasury ETFs, and defensive sector ETFs.  

Other areas of the market that can perform relatively well in stagflation include Treasury inflation-protected securities (TIPS) ETFs, dividend ETFs and real estate ETFs. However, in 2024, with persistently high inflation and interest rates, investors have favored short-term Treasury ETFs, which have higher yields and lower market risk, and utilities ETFs for income generation combined with defensive qualities.

Stagflation can be a volatile economic period. Investors are encouraged to consider their risk tolerance and choose ETFs that align with their comfort level primary investment objectives.

It's important to remember that past performance is not necessarily indicative of future results and diversification is wise in uncertain environments.  

Kent Thune is Research Lead for etf.com, focusing on educational content, thought leadership, content management and search engine optimization. Before joining etf.com, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger. 


Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship. 


Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.