Inflation has reached its highest levels in over 40 years. However, the worst may be yet to come. Investors will need flexible strategies to stay ahead of flawed global monetary policy and ongoing supply shortages.
In the upcoming webcast, How to Stay One Step Ahead of Inflation with Real Assets, David Schassler, Portfolio Manager and Head of Quantitative Investment Solutions Group, VanEck, will highlight what advisors can do to protect client portfolios amid 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 now, have significantly outpaced inflation during high inflationary periods. They include commodities, companies that benefit from higher commodity prices, companies with revenues tied to tangible real assets, such as REITs, or companies that can quickly pass along inflation 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 long-term real returns, can help investors gain exposure to real assets. The fund invests in exchange traded products with exposure to real assets, such as real estate, commodities, natural resources, or infrastructure, and may hold up to 100% cash or equivalents.
With higher inflation, real assets have finally awoken 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 stocks, the prices of commodities and natural resource equities may still be cheap and have a lot more room to run.
Additionally, RAAX also includes exposure to bitcoin. Digital assets may offer RAAX many of the same benefits as gold. Most notably, protection against inflation and currency debasement in addition to overall portfolio diversification.
“The Inflation Allocation ETF, RAAX, invests in the primary assets that benefit from higher inflation. And, over the past year, it has been overweight commodities and natural resource equities, both of which have been top performers during this inflation-fueled rally,” Schassler added.
Financial advisors who are interested in learning more about real assets can register for the Tuesday, May 3 webcast here.