Considering that the Federal Reserve has been meeting this week, it’s safe to say that inflation is likely front-and-center on the minds of many advisors and investors. After all, energy prices and supply chain constraints have kept inflationary pressures far more persistent than the Fed would like.
Key Takeaways:
- The Federal Reserve just finished up its July meeting, opting to leave interest rates unchanged.
- However, with inflation continuing to pressure the economy and committee members pushing to hike rates soon, advisors may want to opt for more inflation protection in their portfolios.
- Real asset ETFs offer multiple ways of gaining total return while mitigating the brunt of inflation.
This week’s Fed meeting was one of the more closely-watched ones, as folks were largely uncertain about what the outcome would be. However, while the committee did opt to keep rates steady for now, three officials did dissent and vote for a rate hike. As such, rates remain the same as of now, but this could change in the coming months.
With this in mind, folks may want to reassess how much inflation protection is in their portfolios. As inflation persists, advisors should see growth strategies tailored for tough market conditions..
Time to Turn to Real Assets?
Real assets provide a broad solution for today’s market, protecting portfolios against inflation while supporting diversification and total return potential. Investors can build real asset exposure in several different ways, including through a diversified approach like the State Street Multi-Asset Real Return ETF (RLY).
RLY is an actively managed ‘fund of funds’ that invests in a variety of other real asset ETFs. This allows the fund to access a variety of different real asset sectors, such as natural resources, commodities, global infrastructure, and others. For those seeking a one-ticker solution to real asset exposure, RLY could be an appealing pick.
