ETF Talk: RAAX — Real Assets Provide Real Security

“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%.

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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.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.