How to stay ahead of inflation with real assets
Inflation has reached its highest levels for more than 40 years. However, the worst may be yet to come. Investors will need flexible strategies to stay ahead of faulty global monetary policy and ongoing supply shortages.
In the next webcast, How to stay ahead of inflation with real assetsDavid Schassler, Portfolio Manager and Group Head of Quantitative Investment Solutions, VanEck, will highlight what advisors can do to protect client portfolios in times of entrenched inflation.
“The good news is that investors can do something about it. They can invest in assets that benefit from higher inflation. These are assets that historically and today have significantly outpaced inflation during periods of high inflation. These include commodities, companies that benefit from rising commodity prices, companies whose earnings are tied to tangible real assets, such as REITs, or companies that can quickly pass inflation on to their customers, such as infrastructure,” Schassler said in a research note.
the VanEck Inflation Allocation ETF (RAAX), an actively managed fund of funds that seeks to maximize real long-term returns, can help investors gain exposure to real assets. The fund invests in exchange-traded products exposed to real assets, such as real estate, commodities, natural resources or infrastructure, and may hold up to 100% cash or cash equivalents.
With higher inflation, real assets have finally woken up from their decade-plus hibernation, and most are leading the markets higher. The lost decade-plus in commodities has created a situation where, relative to equities, commodity and natural resource stock prices can still be cheap and have a lot more room to maneuver.
Additionally, RAAX also includes bitcoin exposure. Digital assets can provide RAAX with many of the same benefits as gold. More specifically, protection against inflation and currency depreciation in addition to overall portfolio diversification.
“The inflation allocation ETF, RAAX, invests in core assets that benefit from higher inflation. And, over the past year, he has been overweight commodities and natural resource stocks, both of which have been the best performers during this inflation-fueled recovery,” Schassler added.
Financial advisors interested in learning more about Real Assets can register for the Tuesday, May 3 webcast here.