uploads/// Returns

RAAX: Key Focus Areas for Long-Term Considerations


Apr. 24 2018, Updated 12:50 p.m. ET


KEMMERER: Now that we understand the investment process overall, can you give us a few example sectors and how they work?

SCHASSLER: So, again, [we are] comprehensive from a real asset perspective: commodities, commodity equities, REITs, infrastructure, and MLPs, we approach each of these differently. We want to understand what makes each real asset sector tick, and then jump into it from a quantitative perspective and model that. If we’re going to look at something like REITs, we’re going to want to understand the strength of the housing market. We’re going to want to look at things like new home sales. We’re going to look at things like existing home sales. That’s our approach to model building.

KEMMERER: Thank you both so much for taking the time not only to share how real assets are fairing and why it’s a good time to be invested in them and how exactly this product works.

SCHASSLER: Thank you so much.

MORRIS: Thank you.

KEMMERER: And thank you for tuning in. For this and other insights from VanEck specialists, visit vaneck.com/subscribe. From New York, I’m Gillian Kemmerer.

Article continues below advertisement

Market Realist

Comprehensive industry analysis could boost portfolio returns

An investment process that comprises comprehensive industry analysis has the potential to generate higher returns. Key focus areas for long-term considerations could involve the analysis of factors like industry-specific supply and demand modeling, the consistency of cash flow generation, expected future earnings, and risk drivers. Real asset categories that tend to offer more consistent returns over time could form a core of the portfolio. And in most cases, the potential to generate sustainable returns could be due to the quality of cash flows.

The consistency of returns is the key

As the chart above shows, real assets like MLPs (AMLP), real estate (VNQ), and infrastructure (IGF) have all generated relatively consistent returns over time. Real estate companies own and operate properties like apartments (AVB), office buildings (BXP), shopping malls, and healthcare facilities. Their operations are structured such that they can generate long-term and sustainable cash flows that enhance their ability to generate attractive returns over time. On the other hand, cash flow streams for infrastructure companies often depend on long-term leases or concession agreements they signed with clients. These agreements are normally linked to inflation, offering a higher probability of consistent returns.


More From Market Realist

  • Compass listing on the NYSE
    Real Estate
    Compass Stock Is a Good Long-Term Buy, Near IPO Price Levels
  • Refinance display on a laptop
    Personal Finance
    What Happens When You Refinance Your Home?
  • Home in a neighborhood
    Real Estate
    How to Apply for a HARP Refinance Alternative
  • biden homebuyer credit
    Real Estate
    First Generation Homebuyers to Benefit From Biden's Plan
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.