With the threat of stagflation looming, getting real assets exposure is almost a must in the current market, which is where FlexShares can help with four ETFs to consider.
Until recently, the common refrain in the capital markets has been that inflation is transitory. However, that tune is changing as threats of prolonged inflation are starting to creep into the markets.
That said, getting exposure to hard assets can serve as a safe haven from the economic headwinds that appear imminent. Whether it’s real estate, precious metals, or other assets, tangible assets exposure is almost imperative.
“Holding hard assets outside the banking system may be the best form of insurance against risks within the banking system,” wrote Mike Gleason of Money Metals Exchange in a FX Street article. “And precious metals, being tangible forms of money, are at the foundation of any strategy to protect against risks inherent in the fiat currency regime.”
An Aggregate Solution
Investors who don’t know where to start can opt for an aggregate option in the FlexShares Real Assets Allocation Index Fund (ASET ). ASET can give investors exposure to it all through one position, and volatility is minimized due to ASET holding companies that represent real asset exposure versus the actual tangible assets themselves.
ASET seeks investment results that correspond generally to the price and yield performance of the Northern Trust Real Assets Allocation Index. The underlying index measures the performance of an optimized allocation to the underlying funds that is intended to provide exposure to certain real assets and minimize the overall volatility of an investment in the underlying funds.
Three Sector-Specific Options
For real estate-specific exposure, ETF investors can look at the FlexShares Global Quality Real Estate Index Fund (GQRE ). GQRE seeks investment results that generally correspond to the price and yield performance (before fees and expenses) of the Northern Trust Global Quality Real Estate Index, which is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to quality, value, and momentum factors relative to the Northern Trust Global Real Estate Index.
Another fund focuses on infrastructure, which is getting a lot of attention this year thanks to U.S. president Joe Biden’s trillion dollar infrastructure bill. As such, there’s the FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA ).
NFRA seeks investment results that generally correspond to the price and yield performance (before fees and expenses) of the STOXX® Global Broad Infrastructure Index. The index reflects the performance of a selection of companies that, in aggregate, offer broad exposure to publicly traded developed- and emerging-market infrastructure companies, including U.S. companies, as defined by STOXX Ltd. pursuant to its index methodology.
Lastly, there’s an energy-focused fund in the FlexShares Morningstar® Global Upstream Natural Resources Index Fund (GUNR ). GUNR seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar® Global Upstream Natural Resources IndexSM.
The index reflects the performance of a selection of equity securities that are traded in or are issued by companies domiciled in global developed or emerging markets, as determined by the index provider pursuant to its index methodology.
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