VanEck launched a new ETF on Tuesday that aims to provide exposure to real assets while seeking to minimize the impact of drawdowns.
The VanEck Vectors® Real Asset Allocation ETF (NYSE Arca: RAAX) looks to real asset exposures including commodities and companies involved in natural resources, real estate, and infrastructure.
Real assets can potentially help investors combat rising inflation, enhance portfolio diversification, and participate in global growth. The new fund uses a rules-based model to allocate among approximately 12 exchange-traded products (ETPs) and has the ability to allocate up to 100% to cash and cash equivalents in the event of market stress.
The ETPs provide exposure to agribusiness, coal, infrastructure, real estate, steel, oil services, unconventional oil & gas, and gold mining companies as well as diversified commodity futures exposure and physical gold.
Ed Lopez, Head of ETF Product at VanEck, said RAAX is the type of solution-oriented ETF our investors expect from VanEck.
“Its innovative allocation and risk-management methodology is indicative of VanEck’s commitment to offering forward-thinking investment solutions,” Lopez said.
David Schassler, Portfolio Manager for RAAX, said VanEck has been a long-time proponent of the benefits of real asset investments, both from a performance and portfolio diversification perspective.
“We also understand that the volatility of real asset investing is a challenge for many investors,” Schassler said. “These are predominantly cyclical sectors that experience frequent periods of high volatility. RAAX was specifically designed to address this. It is a real asset investment solution with built-in risk management.”
VanEck also notes that real asset investments are not without their risks, which can include susceptibility to adverse economic events, natural disasters, geopolitical risks, and supply and demand disruptions. RAAX performance is dependent on the performance of underlying funds and is subject to the risks of the underlying funds’ investments.
The Fund is the latest addition to the VanEck Vectors suite of Guided Allocation funds, which includes the VanEck Vectors® NDR CMG Long/Flat Allocation ETF (NYSE Arca: LFEQ).
For more information on new fund products, visit our new ETFs category.