Now that trade war concerns appear to have eased somewhat, decent Q1 earnings have started hitting the market and some upbeat economic readings are coming up, long-term U.S. Yields on 10-year Treasury notes crossed the 2.9% mark on Apr 19, marking the one-month high. Moreover, expectations are rife that the Fed will enact three or possibly four interest rate rises this year after New York Fed President William Dudley made such comments lately.

He also indicated that the Fed may target raising the policy rate to about 3%. Also, inflation expectations jumped to the highest level in about three years thanks to the multi-year high commodity prices. Given this, investors must be interested in finding out the ways to weather a sudden jump in the benchmark bond yields and increased inflationary expectations. For them, below we highlighted a few ETFs. Higher inflationary expectations make it necessary to focus on an inflation-oriented fund.

The underlying index — the Citi 30-Year TIPS (Treasury Rate-Hedged) Index — tracks the performance of long positions in the most-recently issued 30-year TIPS and duration-adjusted short positions in U.S. Treasury bonds of, in aggregate, approximate equivalent duration dollars to the TIPS. It yields 2.80% annually and charges 30 bps in fees. This ETF is a strategic interest rate-hedging tool that gives investors the opportunity to benefit from the rise in the interest rates.

The portfolio targets a negative 10-year duration using futures and options on two, five and 10-year maturity Treasury futures contracts. It charges 43 bps in annual fees and expenses (read: Best Dividend Growth ETFs for Rising Rates). The underlying NASDAQ International Multi-Asset Diversified Income Index uses a modified market-capitalization weighting methodology and is designed to provide exposure to multiple asset segments outside the United States. The fund yields about 5.35% annually (read: Is it Time to Bet on These Multi-Asset ETFs,).

The 87-stock fund looks to offer capital appreciation with a focus on lower volatility than the broader equity market, as measured by the Russell 1000 Index. The fund charges 50 bps in fees. No stock accounts for more than 1.45% of the basket. This ETF offers exposure to U.S. Since the coupons of these bonds are adjusted periodically, they are less sensitive to an increase in rates compared with traditional bonds. As such, unlike fixed coupon bonds, these will not lose value when the rates go up. Hence, it protects investors from capital erosion in a rising rate environment. The fund charges 20 bps in fees.

As I said at the beginning of the year, the sector picks should receive smaller allocations because they can be either the best performers or the worst for any given year. The idea is to have two out of three of your sector picks outperform the major market indices. XLE's prospects for the remainder of the year still look similar as they did at the beginning - still a contrarian bet.

One glimmer of hope emerging for XLE, and a contrarian indicator as the first quarter ends, is that the price for oil is near a three-year high, while the energy sector lags. Adding to recent potential promise for XLE, is renewed interest for big oil stocks from prominent analysts. For example, just a few days prior to writing this story, Goldman Sachs issued a bullish view on the energy sector.

Goldman also has buy ratings on Chevron Corporation (NYSE: CVX ) and ConocoPhillips (NYSE: COP ), which are top holdings in XLE. The underpinning support for energy stocks to move higher in 2018 comes from adjustments that big oil firms have had to make in recent years amid weak oil prices.

Having to rein in capital spending has positioned these companies to be profitable at lower prices on oil. Therefore, energy stocks may be in position now to finally turn in the positive direction. With the benefit of hindsight, the first quarter of 2018 was not a good time to hold XLE. As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities, although he holds XLE in some client accounts. Under no circumstances does this information represent a recommendation to buy or sell securities.

70: Play the Surge With Leveraged ETFs). Analysts in the oil market believe that the United States is looking to cancel the Iran nuclear deal, which will affect oil exports of Iran directly. In addition to this, OPEC countries under the output cut deal, are observing a decrease in production capacity that should be paving the way for a steep rise in oil prices. Venezuela has also lowered its oil production due to economic crisis.