IndexIQ, a subsidiary of New York Life Investments, has launched a new actively managed ETF providing diversified exposure to real asset securities.
Joseph Smith, Chief Investment Officer, Listed Real Assets, CBRE Investment Management.
The IQ CBRE Real Assets ETF (IQRA US) has been listed on NYSE Arca with an expense ratio of 0.65%.
Real assets are considered distinct from financial assets, which derive their value from a claim on other assets. Real assets get their value from their own intrinsic and inherent qualities, such as commodities and natural resources, real estate, and infrastructure.
Real asset investments offer many potential benefits to traditional stock/bond portfolios including lower volatility, enhanced diversification, and an inflation hedge.
Perhaps most importantly, real assets have historically tended to perform well during periods of market stress and, as such, are potentially useful as a risk management tool, offering downside protection.
Investment approach
The ETF is sub-advised by CBRE Investment Management (CBRE IM), a New York-headquartered investment firm specializing in real asset solutions, with the fund’s portfolio management team headed up by Joseph Smith, Chief Investment Officer, Listed Real Assets, and Jeremy Anagnos, Chief Investment Officer, Listed Infrastructure.
The fund invests primarily in the common securities of global real estate and infrastructure companies, including real estate investment trusts (REITs). Up to 30% of the portfolio may be allocated to securities listed in emerging markets.
Investing across both traditional and next-generation real estate and infrastructure sectors, the ETF seeks out industry leaders that are poised to benefit from secular and cyclical investment themes. Targeted companies will typically exhibit regulated or contractual cash flows and a history of stable income growth, thereby providing a hedge against persistent inflation.
Joseph Smith said: “We are excited to partner with Index IQ to deliver this actively managed ETF that leverages the full research and investment resources of CBRE IM. We believe that the essential nature of the assets will underpin the potential for reliable and predictable growth of company earnings and dividends and a compelling opportunity for competitive risk-adjusted returns over the long term.”
Sal Bruno, CIO of IndexIQ, added: “Real assets, such as real estate and infrastructure, can play a meaningful role in portfolios, particularly in an environment with rising rates, continued volatility, and inflation. We are very excited to be introducing an active approach to this key sector in partnership with the seasoned Global Listed Real Assets Investment Team at CBRE IM and as part of our ongoing commitment to bringing investors and advisors the highly differentiated solutions they need to build resilient portfolios. We believe IQRA offers a compelling, dynamic, risk-managed approach to asset allocation and for attractive income generation potential.”