'All Roads Lead to Inflation': 3 ETFs to Hedge Like a Billionaire

Inflation has been a hot topic of intense debate between the two presidential candidates ahead of next week's election, but billionaire hedge fund manager Paul Tudor Jones warns that inflation is set to keep rising under both candidates.

In a recent CNBC interview, Jones said, “All roads lead to inflation,” and added that he's hedging with a few familiar favorites: “I am long gold. I am long bitcoin… I think most young people find their inflation hedges via the Nasdaq, that's also been great. I probably have some basket of gold, bitcoin, commodities and Nasdaq, something like that. And I own zero fixed income.” 

According to the billionaire, who says he's positioning for a second Trump term, both candidates are “handing out tax cuts like they're Mardi Gras beads,” and he expects that the U.S. is “going to be broke really quickly unless we get serious about dealing with our spending issues."

For investors who share the billionaire's concerns about a possible “Minsky moment,” here are three top ETFs to add exposure to gold, bitcoin, and the Nasdaq-100 Index.

#1. Sprott Physical Gold Trust

Founded in 2008 by Eric Sprott, a prominent Canadian investor and entrepreneur, the Sprott Physical Gold Trust ETF (PHYS) is an ETF that invests solely in physical gold bullion. Unlike other gold ETFs that invest in gold futures contracts (GCZ24) or mining companies, PHYS holds actual physical gold, stored securely in vaults. This direct ownership of physical gold offers investors a tangible asset that can protect against inflation and economic uncertainty. 

With an AUM of about $9 billion, PHYS doesn't quite have the same punching weight of the SPDR Gold Shares (GLD), at $74.8B AUM, but it does have certain tax advantages that can add significant appeal for some investors.

Shares of the PHYS ETF are up 35.2% on a YTD basis, edging out cash gold(GCY00) by a slim margin. 

PHYS has a competitive expense ratio of 0.41% and average volume of about 1.8 million shares, ensuring healthy liquidity.

#2. iShares Bitcoin Trust ETF

The iShares Bitcoin Trust ETF (IBIT) belongs to the BlackRock (BLK) family, the world's largest asset manager. The ETF, listed in January 2024, was one of the first to be approved based on spot Bitcoin (BTCUSD) prices. It provides investors with a convenient way to gain exposure to Bitcoin without having to directly buy and store the cryptocurrency themselves. IBIT's AUM currently stands at a significant $25.6 billion.

Shares of IBIT are up 15% over the last six months, and set a new all-time high of $41.96 today. 

The fund's expense ratio is 0.25%, and IBIT offers robust liquidity, with average volume topping 33 million shares.

#3. Invesco QQQ Trust

We conclude our list with one of the most popular ETFs on Wall Street, the Invesco QQQ Trust (QQQ). The Invesco QQQ Trust, Series 1, commonly known as the QQQ, was launched in March 1999. QQQ is an ETF that tracks the Nasdaq-100 Index ($IUXX), comprised of roughly 100 of the largest non-financial companies listed on the Nasdaq Stock Market. 

While it doesn't have an exclusive tech focus, QQQ is heavily skewed toward mega-cap technology companies. Top holdings include Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), Meta Platforms (META), Amazon (AMZN), and Tesla (TSLA), before retail giant Costco (COST) briefly interrupts the theme.

Up 22.1% on a YTD basis and 1,200% over the past two decades, QQQ's AUM stands at a staggering $298 billion. 

QQQ also offers a dividend yield of 0.57%, and a slim expense ratio of 0.2%. Daily share volume for QQQ is around 27 million, facilitating easy order entry and exit for most investors.

With its broad exposure to top domestic growth names, QQQ is an ideal long-term buy-and-hold investment. However, the ETF's remarkably liquid and active options market also makes it easy to hedge and speculate on a short-term basis, too.

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On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.