Specialty ETFs have emerged due to the inflation narrative, according to a market analyst.

One trend watcher stated that exchange-traded fund investors are carefully selecting their investments in the market as inflation concerns increase.

ETF Action founding partner Mike Akins stated on CNBC's "ETF Edge" on Monday that while ETF inflows and outflows have remained relatively stable in recent months, shifts in the underlying sectors indicate a different narrative.

He stated that significant changes are occurring in the technology, communications, energy, and financial sectors.

Currently, the energy sector accounts for 11% of the $600 billion U.S. ETF market, according to Akins.

WisdomTree Enhanced Commodity Strategy Fund (GCC)

One ETF feeling the heat is (GCC).

According to Akins, commodity ETFs are benefiting from backwardation, which occurs when front-month futures prices are higher than those further on the curve, making it profitable to roll futures contracts over.

"We believe there will be continued inflows into this space, as it is rightfully so, in our opinion at ETF Action," he stated.

WisdomTree's 75 ETFs' top performer in 2022, GCC, is being utilized as an inflation hedge, according to Jeremy Schwartz, global head of research and executive vice president at WisdomTree Asset Management.

"Schwartz stated that bonds no longer offer as much diversification as they once did. He explained that there is a fear of inflation, and interest rates are rising from the Fed. For a standard 60-40 portfolio allocation, commodities and inflation-sensitive investments are one of the diversifiers."

The fund's performance has increased by more than 9% year to date, and it invests in a variety of futures contracts, including energy, agriculture, and metals, as well as up to 5% in bitcoin futures.

Amplify Inflation Fighter ETF (IWIN)

Another firm is taking a hybrid approach in addressing inflation concerns.

Christian Magoon, founder and CEO of Amplify ETFs, stated in a recent "ETF Edge" interview that the recently launched IWIN ETF is a combination of inflation-sensitive stocks and commodity futures contracts.

The ETF has experienced a rise of over 3% since its launch, and its portfolio includes mining companies, land developers, homebuilders, real estate investment trusts, agriculture, gold, and bitcoin.

Magoon stated that our goal was to construct a diversified portfolio with a stake in it to combat inflation and hedge, without fully committing to commodities and backwardation and contango, while also considering the equity space, as many companies are sensitive to inflation if the selection is accurate.

The top five holdings of IWIN are the (GBTC), the (GLDM), the (PDBC), the (CORN), and a real estate company.

WisdomTree U.S. Quality Dividend Growth Fund (DGRW)

Schwartz of WisdomTree stated that dividend-based strategies are gaining traction among investors.

The DGRW now has $7 billion in assets to support its forward-looking strategy, which employs quality metrics, return on equity data, return on assets data, and earnings growth expectations to identify companies that are most likely to continue increasing their dividends.

Its top holdings are , , , and .

"Schwartz stated that the combination of defensive rotation and dividend screen has made the fund one of the best performers in the large blend category for the past three months. Additionally, the fund's top 2% ranking among all large blend funds is due to its good-quality earnings that support the dividend."

WisdomTree U.S. Efficient Core Fund (NTSX)

Specialty ETFs that mix allocation strategies are also gaining steam, Schwartz said.

His company's (NTSX) assets are approaching $1 billion by providing an actively managed portfolio of U.S. equities and Treasury futures contracts in a leveraged version of the traditional 60% stock, 40% bond structure.

"Twitter-born individuals created this product," Schwartz stated. "Its objective is to maximize value for money. For every dollar spent, you receive $1.50 of exposure, 90 cents of equities, and 60 cents of bond futures."

Schwartz advised devoting two-thirds of capital to NTSX's 60-40-inspired strategy and using the remaining third for diversification and risk management.

Since its launch in 2018, NTSX has experienced a nearly 67% increase in value. In May 2021, WisdomTree introduced international and emerging markets versions of the strategy, NTSI and NTSE.

WisdomTree Floating Rate Treasury Fund (USFR)

Another alternative solution for those who don't want to own fixed-rate bonds in an uncertain environment is offered by USFR.

Treasury securities with the shortest duration are floating-rate Treasurys, which were first introduced by the government in 2014 and have their rates reset weekly instead of being fixed.

"According to Schwartz, the Fed has announced that they are on a course to increase interest rates. During the previous rate hike cycle, the floating rate Treasury yielded the highest return at the end of the cycle. Our prediction is that this will happen again. Therefore, USFR is the best way to profit from the Fed's rate hike."

Amplify BlackSwan Growth & Treasury Core ETF (SWAN)

Another Amplify product seeks to strike a balance between risk-off and risk-on assets in the face of unpredictable, "black swan" market events.

The company's (SWAN) strategy involves a "barbell approach" to its mission, with approximately 88% invested in U.S. Treasurys and 11% in (SPY) or Nasdaq options.

Amplify's Magoon stated that the product enables you to obtain between 50%-70% of the return of the relative index, such as the Nasdaq or S&P, while maintaining constant exposure to the market.

During the early Covid pandemic stock market collapse, SWAN experienced a smaller decline of 9% compared to the S&P's 30% drop over a few days.

"Investors tend to focus on U.S. Treasurys when market volatility increases or geopolitical events occur, as these investments can provide a hedge against potential risks."