Many nervous investors have flocked to the safety of US Treasuries this year, depressing the yields of those investments so low that they don’t keep up with inflation. Adam Harter has sought out better inflation-fighting alternatives that he believes are worth some extra risk. Three of his favorite inflation-fighting exchange-traded funds (ETFs) now…

iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD). Back in February, Harter moved clients’ money out of Treasuries and into this ETF that invests in investment-grade corporate bonds. The yields of some high quality corporate bonds are roughly two percentage points higher than those of Treasuries. Investors face little extra risk because the balance sheets of the blue chips are very strong. Recent share price: $105.76.

iShares S&P Latin America 40 Index Fund (ILF). Harter is enthusiastic about this ETF because Latin American countries are heavily invested in raw materials and agriculture, which are just the kind of commodities that can be inflation fighters. Investors will benefit from what is expected to be the continued rise in the prices of corn, beans, wheat and other agricultural products. Recent share price: $270.47.

iShares MSCI Pacific ex-Japan Index Fund (EPP). Natural resources play a big role in this ETF, which includes stocks from Australia and several other countries on the Pacific Rim, excluding Japan. Another bonus: the ETF’s dividend yield of 5%. Recent share price: $143.85.

Source: Adam Harter, who as director of operations at Financial Enhancement Group in Anderson, Indiana, oversees the firm’s asset allocation strategies. The fee-only firm’s composite portfolio strategy generated average annual returns of 9.7 percent for the three-year period through December 31, 2007, compared with 6.7% for the Standard & Poor’s 500 Stock Index.

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