Real Asset ETFs: Building a Multi-Asset Portfolio Against Economic Uncertainty

In today’s volatile markets, investors increasingly recognize that exposure to real assets represents not just an option—but a necessity. With stagflation concerns mounting and traditional assets facing headwinds, real asset ETFs have emerged as a practical solution for those seeking tangible value and portfolio stability. FlexShares offers several compelling vehicles to help investors navigate this landscape and establish meaningful positions in physical and tangible assets.

For decades, the prevailing wisdom suggested inflation would remain temporary. That narrative has shifted considerably. As economic pressures intensify and warnings of sustained inflation grow louder, prudent investors are turning their attention toward hard assets—real estate, precious metals, commodities, and infrastructure—as essential portfolio components. As one industry analyst noted, “Holding hard assets outside the banking system may be the best form of insurance against risks within the banking system. 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.”

The Case for Real Asset Diversification in Uncertain Markets

Why pursue real asset allocation now? The answer lies in understanding how tangible assets behave differently from traditional stocks and bonds. While financial assets can be subject to systemic banking risks, real assets maintain intrinsic value and provide natural hedges against inflation and currency debasement. This fundamental distinction makes real assets an increasingly important pillar of comprehensive portfolio construction.

All-in-One Real Asset Allocation: The ASET Approach

For investors uncertain where to begin their real asset journey, an aggregate solution provides an excellent entry point. The FlexShares Real Assets Allocation Index Fund (ASET) delivers broad-based exposure across multiple real asset categories through a single holding.

ASET tracks the Northern Trust Real Assets Allocation Index, which measures performance across an optimized mix of underlying real asset funds. Rather than purchasing individual precious metals or physical properties, investors gain exposure through fund holdings—a structure that effectively reduces portfolio volatility while capturing the performance of multiple real asset classes simultaneously. This diversified approach appeals to investors who want comprehensive real asset exposure without the complexity of managing multiple positions.

Targeted Real Asset Exposure: Sector-Specific Fund Options

Beyond the aggregate approach, FlexShares provides three sector-focused real asset ETFs for investors with specific convictions about particular asset classes:

Real Estate Investment: The FlexShares Global Quality Real Estate Index Fund (GQRE) offers investors exposure to quality-focused real estate companies with demonstrated value and momentum characteristics. GQRE tracks the Northern Trust Global Quality Real Estate Index, selecting companies that collectively provide superior exposure to quality factors compared to broader real estate indexes.

Infrastructure Positioning: Infrastructure has become increasingly central to investment strategies, particularly following policy developments that emphasize national infrastructure renewal. The FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA) provides access to publicly traded infrastructure companies across developed and emerging markets. NFRA follows the STOXX Global Broad Infrastructure Index, capturing the performance of companies offering broad exposure to infrastructure assets globally.

Natural Resources and Energy: For investors seeking commodity-linked real asset exposure, the FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR) represents an energy and upstream resources option. GUNR tracks the Morningstar Global Upstream Natural Resources Index, providing exposure to equity securities in natural resource and energy companies domiciled across developed and emerging markets.

Constructing Your Real Asset Strategy

Whether you select a single aggregate real asset fund or combine multiple sector-specific positions, the underlying principle remains constant: real assets serve as essential portfolio ballast during periods of economic uncertainty. Each real asset ETF option addresses different investor priorities—from simplicity and diversification to targeted sector exposure. By understanding how these vehicles work and what underlying assets they represent, investors can make informed decisions aligned with their specific real asset allocation goals and risk tolerance levels.