Investors understand that geopolitical risks are an inevitability and can have significant impacts, often negative, on their portfolios.
But while it’s clear that these sorts of risk factors tend to cause disruption in the near-term, longer-view investors want to know how they affect the market over wider time horizons? Recent insights from the team at BNY Investments showcased a historical precedent for markets actually stabilizing in the months following a major geopolitical event. As the chart below shows, during the extended time following geopolitical uncertainty, median S&P 500 returns seem to grow.
Some investors may be wondering why markets have historically ended up returning to normal and even improving. BNY Investments attributes much of that recovery effort to economic fundamentals. Eventually, positive fundamentals like fiscal policy and earnings growth help push markets in the right direction.
“The implication for investors: Maintaining a diversified portfolio can help navigate periods of uncertainty while remaining positioned for recovery,” the BNY Investments post added.
See More: BNY’s BKDV Large-Cap Value ETF Passes $1 Billion in AUM
There are plenty of funds that offer potent opportunities for diversification, but the BNY Mellon Global Infrastructure Income ETF (BKGI) could be a particularly effective option. This is because BKGI provides diversification through two distinct avenues: region diversification and sector diversification.
Driving Diversification Through Global Infrastructure
True to the fund’s title, BKGI invests in a variety of different infrastructure companies across the globe. As of March 31, 2026, the fund held 43.11% of its portfolio in assets tied to the United States, with the remainder being housed in international options such as France, Italy, and Canada. With international exposure remaining a sought-after means for crafting a more balanced portfolio, this global allocation could offer a significant boon.
Furthermore, investing in infrastructure companies offers diversification in and of itself. Infrastructure companies tend to be woefully underrepresented in the S&P 500, thus creating a good opportunity for BKGI to fill a needed niche.
BNY Investments’ differentiated approach to infrastructure investing can also help it stand out from its peers in the field. Most infrastructure companies focus on traditional assets like energy, utilities, and industrials, but BKGI’s investment philosophy includes non-traditional infrastructure assets as well. In this case, non-traditional infrastructure assets include companies within communication services, real estate, and health care.
See More: Tap Into the Growing Infrastructure Buildout With BKGI
Taking on non-traditional infrastructure assets can help BKGI offer even more diversification potential within its portfolio. These companies provide new avenues for returns and dividends through sectors that traditional infrastructure funds tend to neglect.
This approach encapsulates why and how BKGI can help investors looking to ride out the volatility of geopolitical uncertainty. The fund’s balanced approach provides diversification on both a sector and global level and can operate as a valuable ballast as investors wait for markets to head in the right direction once more.
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