As the Real Estate Market Adapts, Get Diversification With ASET

The real estate market is ever-changing, especially when it comes to millennial trends, giving more credence for diversification via ETFs like the FlexShares Real Assets Allocation Index Fund (ASET).

Investors considering real estate may not like the idea of becoming the landlord. That’s especially the case when it comes to millennial renters who don’t want to sign long-term leases any longer.

Rather, they’re looking for the flexibility of short-term leases. This might seem disconcerting to property owners seeking long-term tenants to provide that stable income, but they’re having to adapt to this new trend.

“People are splitting time between cities. Younger people can’t afford to sign 12-month leases,” said Daniel Mishin, founder and CEO of June Homes. “So people are looking for flexibility, convenience and ease.”

ETFs like ASET can give investors access to real estate without the headaches of being a landlord. Real estate comprises most of the fund, but doesn’t completely dominate its holdings.

“The FlexShares Real Assets Allocation Index Fund (ASET) is meant to provide comprehensive real asset exposure to real estate, infrastructure, and natural resources,” an ETF Database analysis said.

These real assets also help provide a hedge against inflation. Rising prices in real assets can help stave off the inflationary effects of a portfolio, especially if bonds are a part of the investment mix.

All the Real Assets in One Position

As far as what real assets to hold, ASET removes all the guesswork — as opposed to holding multiple assets like precious metals or commodities like oil, ASET can give investors exposure to it all through one position. Additionally, volatility is minimized due to ASET holding companies that represent real asset exposure versus the actual tangible assets themselves.

ASET seeks investment results that correspond generally to the price and yield performance of the Northern Trust Real Assets Allocation IndexSM. The underlying index measures the performance of an optimized allocation to the underlying funds that is intended to provide exposures to certain real assets and minimize the overall volatility of an investment in the underlying funds.

As of September 23, the top three sector allocations include materials, real estate, and industrials. Moreover, ASET takes a global approach by investing in countries outside of the United States as well, including Canada, the United Kingdom, and Japan.

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