Real Asset Strategies offers two liquid real asset solutions in the search for diversification and inflation protection. Each is driven by a model that derives asset allocation, although the manager retains discretion. The strategies are systematic, and objective; that is, there are no subjective inputs or forecasts that drive the model outputs. The strategies rely on several relatively straightforward philosophies:
- High inflation protection and low correlation to a balanced portfolio are highly desirable benefits so we only include assets that we believe will have such attributes.
- Fees are important.
- Many investors prefer liquid investments.
- Real assets can be volatile and performance can vary between real assets, so fluctuating exposures can help clients improve their returns over static allocations.
Some clients may primarily seek the inflation protection benefits of real assets (while also enjoying the diversification benefits) while others may primarily seek the diversification benefits (while also enjoying the inflation protection): RAS- Diversified and RAS- Focused.
RAS – Diversified:
- Primary objective of maintaining a high level of inflation protection with a secondary objective of low correlation to a 60/40 portfolio, diversified across several liquid real assets.
- There are guidelines that ensure a minimum level of exposure to the most important inflation hedging liquid real assets and maximums that help ensure diversification across real assets.
- Utilizes proprietary quantitative models and indicator to ascertain volatility regimes to fluctuate exposures.
- Trades less frequently, and will maintain a more diversified portfolio.
RAS – Focused:
- Primary objective of a low correlation to a 60/40 portfolio with a secondary objective of inflation protection, diversified across several liquid real assets.
- The guideline minimums are lower and maximums higher so the portfolio can be quite concentrated at times allowing for the opportunity to add more value.
- Utilizes a proprietary quantitative model to fluctuate exposures.
- Trades more frequently, and can hold high concentrations of selected assets.
Custom Investment Advisory
In addition, RAS will also do customized work on inflation and real assets on a project basis. Perhaps you have a need for a special study concerning your specific inflation exposure or real assets needs. Perhaps you have illiquid assets that you would like to build into a portfolio.