VanEck is planning to bring to market an actively managed real assets ETF designed to navigate inflationary environments and mitigate downside risk while delivering “real returns,” or returns adjusted for inflation.
The VanEck Vectors Real Asset Allocation ETF, detailed in a filing submitted to the Securities and Exchange Commission this week, will comprise primarily other ETFs—an active fund-of-funds.
The holdings would include “real assets” ETFs that invest in equity or debt, master limited partnerships, physical commodities, and futures and derivatives of those commodities. The list also includes ETNs, commodity pools and cash as potential holdings.
VanEck defines “real assets” as “commodities, real estate, natural resources and infrastructure, as well as companies that own, operate, or derive a significant portion of their value from real assets or the production thereof.”
The security selection process looks into various metrics such as technicals, macroeconomic factors and sentiment indicators to pick which real assets ETPs are likely to offer positive returns.
The idea is similar to a fund from Northern Trust’s FlexShares, the FlexShares Real Assets Allocation Index Fund (ASET).
ASET is also a fund-of-funds ETF, which seeks to give investors diversified exposure to real assets with a portfolio comprising three ETFs, all by FlexShares, tapping into global infrastructure, real estate and natural resource equities.
ASET, which is a passive strategy, allocates heavily to real estate—about 40% of the portfolio—followed by industrial names and utilities. Launched in 2015, it has yet to find much of a following, with only $5 million in total assets.
VanEck did not disclose a ticker or fees for the proposed fund.
Contact Cinthia Murphy at [email protected]