The March Federal Reserve meeting made it clear that investors are dealing with a much different backdrop than they may have thought when the year started. Heading into the year, there were hopes for two, three, or even more interest rate cuts.
Falling interest rates are good for companies that rely on capital to fund their business. It’s the reason why 2025 was a strong year for speculative stocks.
But inflation, as measured by the most used metrics, remains stubbornly above the Federal Reserve’s preferred target. That prompted Federal Reserve Chair Jerome Powell to not dismiss the possibility that interest rates could go higher.
That may be unlikely. What’s more certain is that a higher-for-longer environment will be in place longer than expected. That means looking for investments that can benefit from persistent inflation but don’t require aggressive easing from the Fed.
This means looking beyond “what investments hedge inflation,” to “what investments can hedge inflation and still work if real rates stay higher for longer.” This brings several ideas into play, including targeted exchange-traded funds (ETFs) and companies with investments in physical assets that have room to increase their rates or fees when prices everywhere else are climbing.
Global Real Estate Exposure Helps VNQI Navigate Higher Rates
Real estate investment trusts (REITs) are good investments when rates are moving lower, but can be hit-or-miss when rates stay higher. One way to stay invested in the real estate sector, however, is through an exchange-traded fund (ETF). In addition to a dividend with a yield around 4.5%, there are several solid reasons to consider the Vanguard Global ex-U.S. Real Estate ETF (NASDAQ: VNQI).
First, it has an ultra-low net expense ratio of just 0.12%. Second, it has around $3.5 billion of assets under management (AUM), which gives investors ample liquidity for buying and selling shares.
Third, despite its recent selloff, the VNQI ETF has still delivered a total return of around 10% in the last 12 months.
But what investors may want to pay particular attention to is the fund’s positioning. The VNQI ETF has broader geographic exposure compared to other real estate REITs that are very U.S.-centric.
At a time when money is flowing into emerging markets, having some international exposure may be critical to navigating the volatility in this market.
MLPX ETF Offers Income and Stability in a Volatile Energy Market
Energy stocks, particularly oil and gas stocks, are getting a lift from higher crude oil prices. However, what goes up can come down just as quickly. One way to mitigate that turbulence is by focusing on midstream companies that own and operate the pipelines through which oil and gas move. Or, with the service companies that will be in demand as higher oil prices increase exploration efforts.
All of the above makes the case for the Global X MLP & Energy Infrastructure ETF (NYSEARCA: MLPX). The fund is up over 22% in 2026 and pays a dividend yielding roughly 4%.
The fund provides exposure to both the United States and Canadian oil markets, and over 84% of the fund’s holdings are in the Oil & Gas Storage & Transportation sector.
That gives investors access to the pipelines that will be necessary as the United States continues to invest in infrastructure.
If investors need another reason to own the MLPX ETF, institutional investors bought the stock heavily in Q4 2025, before the conflict with Iran. It’s likely that buying will remain steady, which should be bullish for this ETF.
Equinix Stock Delivers Growth Through Pricing Power and Data Demand
For investors who still want to go the single stock route, Equinix Inc. (NASDAQ: EQIX) is an attractive choice. The specialized REIT operates at the intersection of long-term demand for data centers and a business model that emphasizes contractual, long-term revenue streams.
The key is that the company’s revenue is likely to rise in the coming year, making Equinix far less sensitive to the direction of interest rates. That’s bullish for investors who are looking for growth that can keep them ahead of inflation.
As of March 23, EQIX stock is up more than 2% in 2026. That weighs on the company’s dividend yield, which is only about 2.2%. However, the payout per share is $20.64 and has grown at an annual rate of around 12% over the last three years.
Despite the stock’s “expensive” price tag of around $955, analysts are still raising their price targets.
Institutions remain steady on their buying, which outpaces selling by around 2.5 to 1.
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The article "3 Smart Investments If Interest Rates Stay Higher for Longer" first appeared on MarketBeat.
