“An investment in knowledge pays the best interest.”
— Benjamin Franklin
In today’s uncertain political landscape, investors must look towards stocks and funds that can outlast even the shakiest of economies. Real assets, physical or commodity-linked assets with a tangible value, are a great way to diversify from stocks and bonds while hedging against inflation.
The VanEck Real Assets ETF (RAAX) is an actively managed exchange-traded fund (ETF) that invests in exchange-traded products (ETPs) offering exposure to real assets, commodities and natural resources. It uses a quantitative, rules-based system to manage its investments.
RAAX is designed to gain exposure to asset classes that perform well when inflation rises, making it an attractive buy right now. This fund of ETFs provides multi-sector exposure to real assets such as energy and materials, which historically have responded well during tumultuous times. This diversification beyond stocks and bonds may lower portfolio risk.
The fund has net assets of $245.41 million and a yield of 1.52%. It has an expense ratio of 0.75%. The fund is seeing some solid returns this year, up 3.10% over the last month, 8.28% over the last three months and 26.72% for the year to date.
Chart courtesy of StockCharts.com.
The top nine holdings account for 70.93% of the portfolio’s total assets and include VanEck Common Strategy ETF (PIT), 19.05%, Global X U.S. Infrastructure Development (PAVE), 11.48%, VanEck Energy Income ETF (NYSE: EINC), 10.58%, State Street Energy Select Sector (NYSE: XLE), 8.21%, State Street Materials Select Sector (NYSE: XLB), 6.40%, iShares Residential and Multisector Real Estate ETF (NYSE: REZ), 5.75%, VanEck Uranium and Nuclear ETF (NYSE: NLR), 3.56%, VanEck Gold Miners ETF (NYSE: GDX), 3.42% and VanEck Natural Resources ETF (NYSE: HAP), 2.47%.
For those who are concerned that inflation will erode purchasing power, RAAX is an ideal ETF because it offers exposure to a wide range of commodities and assets. It is an important addition to any portfolio because real assets will always hold value.
However, don’t just take my word for it. Investors should always do their due diligence before adding any stock, fund or ETF to any of their portfolios.
As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.
