Get Real with Your Portfolio: IVRA's Take on Real Assets

In volatile markets, getting real asset exposure can smooth out the bumpy ride. ETF investors looking for uncorrelated assets can turn to the Invesco Real Assets ESG ETF (IVRA).

Furthermore, the dynamic ability of an actively managed ETF gives fund managers the opportunity to make portfolio adjustments on the fly. IVRA seeks capital appreciation with a secondary objective of current income.

The fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of the value of its net assets in exchange-traded equity securities of “real assets” companies. The “real assets” companies in which the it invests are located in North America and must meet high environmental, social, and governance (“ESG”) standards, as determined by the fund’s sub-advisor.

Exactly what defines real assets? The Invesco website detailing the fund aptly describes what IVRA investments entail.

“‘Real assets are characterized by having physical attributes, including real estate, infrastructure, natural resources and timber. Real assets companies are considered companies that are either principally engaged in real estate, infrastructure, natural resources or timber industries, or support such businesses,” the site noted.

With the fund debuting just a few days before 2021, IVRA is still a relatively new kid on the block. However, it’s already up about 13% since its inception date.

IVRA Chart

Real Assets: A Growing Space

The rise of the ETF industry has helped investors get access to an investing arena that used to only be available to large institutional investors. The advent of ETFs as a dynamic investment vehicle has given real assets more exposure to the masses.

“Institutional investors have long incorporated real asset classes such as commodities, real estate, agricultural land or oil into their portfolios,” an Advisorpedia article explained. “The potential advantages to these types of exposure are many, and include dampening inflation risk, improving portfolio efficiency, accessing stable bond-like yields and participating in equity-like capital appreciation.”

“Financial advisors and individual investors are now following this wisdom and adding real assets to their portfolios, aided by two major factors,” the article added. “First, investment vehicles such as exchange traded funds (ETFs) join a growing menu of mutual funds that can make real assets more readily available. Second, the range of investment strategies is continually expanding, offering asset owners’ maximum flexibility in addressing all their real asset needs.”

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