ETFs for inflation rally to close 2020

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Two exchange-traded fund strategies that allow investors to position for higher inflation outperformed on the last day of 2020. ETFs with exposure to Treasury Inflation-Protected Securities were higher: the iShares TIPS Bond ETF gained 0.1%, and the Schwab US TIPS ETF was up 0.2%. Banks also benefit from steeper inflation, which provides a bigger differential between the rate at which banks lend and the rate they pay for customer deposits. On Thursday, bank-stock ETFs also rose: the Invesco KBW Bank ETF jumped 0.5%, while the Financial Select Sector SPDR Fund was up 0.3%, making it one of the biggest gainers among ETFs tracking the 13 sectors of the S&P 500 . The broader market was slightly lower.
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