Rising inflation is usually a scary sign for investors. Higher food and gas prices in 2021, along with the rising price in construction materials and other goods, are biting consumers on the keister and causing U.S. equities to tumble. Bad as it may seem, one asset class has been a chief beneficiary: commodities.

Prices for nearly all commodities, with a few exceptions like precious metals, are in a major upswing. Commodities have lagged the performance of stocks and real estate in recent years. But for patient bulls, the surge in commodities has been a long time coming.

Many exchange-traded funds linked to commodities have seen strong performance. The United States Commodity Index Fund (USCI), for example, is up 24.5% year to date. USCI selects from a pool of diversified commodities by equal weighting 14 commodities futures contracts across five sectors: petroleum; precious metals; industrial metals; grains and agriculture. The fund’s total expense ratio is 1.10%.

ETFs linked to foodstuffs such as corn and soybean have also been strong performers. 

Since the start of the year, the Teucrium Corn ETF (CORN) and Teucrium Soybean ETF (SOYB) have soared 42% and 22.6%, respectively. As with most niche-focused ETFs, expense ratios are higher. CORN charges 1.95% annually while SOYB charges 1.88%. Both funds are part of Teucrium’s lineup of five ETFs linked to single commodities.

Aside from inflationary forces, commodities prices are heavily influenced by supply disruptions. These disruptions are usually caused by bad weather, war or another unexpected glitches.

In the U.S., gasoline prices have jumped after a recent ransomware attack forced the Colonial Pipeline, a major U.S. fuel pipeline, to temporarily shut down.  

With prices rising, the Federal Reserve in March re-adjusted its inflationary projections from 1.8% to 2.4% as measured by the personal consumption expenditures gauge of prices paid for goods and services by U.S. residents.

The uptick in prices has made winners out of the energy and materials sector.

The Energy Select Sector SPDR Fund (XLE) has jumped 43.1% and the Materials Select Sector SPDR Fund (XLB) is ahead by 21.4% this year. XLB holds companies involved in producing construction materials, chemicals, mining and paper products. Top holdings include DowDuPont, Monsanto, Praxair and Ecolab.

Single-country ETFs with commodity centered economies have also run higher. 

The iShares MSCI Canada ETF (EWC) and VanEck Vectors Russia ETF (RSX) have year-to-date gains of 19.36% and12.84%, respectively. More than one-quarter of EWC’s sector exposure is to stocks in the energy and materials sector. The sector exposure to energy and materials for RSX is even higher at 61.3%.

Whether you own commodities via ETFs with futures contracts, or stocks tied to commodity sectors, there are plenty of opportunities to guard against the resurgence of inflation.  

Ron DeLegge is founder and chief portfolio strategist at ETFguide, and is the author of "Habits Of The Investing Greats."