With inflation ticking higher, now could be the ideal time for investors to consider hard or real assets.
Plenty of exchange traded funds oblige, a group that includes the FlexShares Morningstar Global Upstream Natural Resource Index Fund (NYSEArca: GUNR).
GUNR provides exposure to the rising demand for natural resources and tracks global companies in the energy, metals and agriculture sectors, while maintaining a core exposure to the timberlands and water resources sectors. Investors and advisors who want exposure in the energy sector but are wary about further volatility can utilize a diversified natural resource ETF to capture a broad group of resource companies.
“The FlexShares Morningstar Global Upstream Natural Resources attracted the most flows of all of the group’s 24-strong ETF range, bringing in over $780 million of investor money between September 2015 and 2016 and taking its overall assets under management to $2.7 billion,” reports CityWire.
Infrastructure ETFs also offer real assets exposure and have viewed favorably this election year. That group includes the FlexShares STOXX Global Broad Infrastructure Index Fund (NYSEArca: NFRA).
[related_stories]The ETF tracks the STOXX Global Broad Infrastructure Index and includes traditional utility, energy and transportation subsectors of the infrastructure category, along with communications and government outsourcing/social infrastructure, which should help further diversify the portfolio.
Much of the developed world, including the U.S., and plenty of emerging economies have vast infrastructure needs that will require trillions of dollars of expenditures in the coming years.
Investors can capitalize on that trend with an increasing number of internationally focused exchange traded funds. Fortunately for conservative investors, playing the global infrastructure theme does not mean having to incur the increased volatility of a pure emerging markets fund because several global infrastructure ETFs feature deep developed markets exposure.
Related: A Little Known Outperforming Infrastructure ETF
“The FlexShares STOXX Global Broad Infrastructure ETF, attracted $125 million over the same period. It allocates around 30% each to communication and energy, with 26% in transportation and the remaining 15% split evenly between utilities and government outsourcing,” adds CityWire.
The American Society of Civil Engineers estimated that $3.32 trillion in infrastructure investments will be required between 2016 and 2025. Infrastructure financing is among the major issues for current presidential candidates.
For more information on the infrastructure sector, visit our infrastructure category.
FlexShares Morningstar Global Upstream Natural Resource Index Fund (NYSEArca: GUNR)
