Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Portfolio Strategies
    • Retirement Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Multi-Asset Channel
  2. As Equity Correlations Surge, Tap Real Assets
Multi-Asset Channel
Share

As Equity Correlations Surge, Tap Real Assets

Elle CarusoJul 05, 2022
2022-07-05

As the U.S. equity benchmark completed its worst first half since 1970 with an 8% monthly decline, correlations between the daily performances of S&P 500 constituents continued to surge upwards, reaching a two-year high of 0.54 over June, S&P Dow Jones Indices reported. 

Real assets are a vital component of a well-diversified portfolio, making the FlexShares Real Assets Allocation Index Fund (ASET B-) particularly attractive in the current environment. ASET is designed to provide comprehensive real asset exposure to real estate, infrastructure, and natural resources, according to VettaFi. 

ASET employs a “fund of funds” model to provide broad, balanced exposure to real assets, while seeking to minimize volatility. ASET’s portfolio consists of three other FlexShares funds: the FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR A+), the FlexShares Global Quality Real Estate Index Fund (GQRE B-), and the FlexShares STOCCGlobal Broad Infrastructure Index Fund (NFRA A). 

The wrong mix of real assets may lead to inadvertently increasing a portfolio’s overall volatility, and research from FlexShares finds that a professionally managed, optimally balanced real assets fund may offer an easier way to capture the benefits of real assets investments, according to FlexShares.

NTI uses a methodology based on modern portfolio theory to optimize the three underlying funds. This methodology involves analysis of the volatility of the underlying securities held by the three ETFs to determine the optimal proportion of each fund in the final portfolio, with an eye toward minimizing volatility and reducing risk, according to FlexShares. NTI rebalances the weightings of each ETF in the index annually. It also applies constraints to help ensure that exposure to each fund is no lower than 10% and no higher than 50%.

For more news, information, and strategy, visit the Multi-Asset Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X