The objective of this model is to hold securities that have a higher correlation to inflation and/or own tangible/hard assets. The model is broadly diversified and has a bias to income producing hard assets. It is expected to produce positive real returns in a higher inflation environment.


REAL ASSET MODEL CORE-SATELLITE IMPLEMENTATION

A Core and Satellite approach has been used to build this model, with the Core including low cost, primarily market capitalization weighted ETFs across four main segments of the market: 1) Real Estate Investment Trusts 2) Infrastructure/Master Limited Partnerships 3) Commodities & Precious Metals and 4) Inflation Linked Fixed Income. The Satellite allocations include ETFs that track alternative indices, attempting to add alpha over the Core indices. Examples include dividend weighted ETFs, sector/thematic ETFs, long/flat[/glossary] commodity indices, fixed duration inflation indexed ETFs, actively managed senior bank loan ETFs, etc.

Real-Asset


REAL ASSET MODEL COST SUMMARY

  • The weighted average cost of the Real Asset Model is 0.50%*
  • This compares very favorably to a blended basket of Morningstar Real Asset Category Mutual Funds 1.23^
  • This is a reduction of 59% when compared to active money manager costs!

 

*As of 9/30/2019.  The Model Weighted Average Net Expense Ratio applies only to the portion of the model that is comprised of mutual funds and/or ETFs. It reflects expense waivers or reimbursements from the fund companies, which may not be permanent. The data used to calculate the Model Weighted Average Net Expense Ratio is obtained from a third-party data provider and is believed to be accurate, but has not been verified by Envestnet. The Model Weighted Average Net Expense Ratio will only be shown if fund expense ratios are available on all mutual funds and ETFs used in the model.

^Average expense ratio for equal-weighted basket of US Fund categories, including: Inflation-Protected Bond, Natural Resources, Energy, Equity Precious Metals, Global Real Estate, and US Real Estate. (Source: Morningstar Direct)

 

^Equal-weighted e