A new exchange-traded fund (ETF) has entered the market, focusing on real estate and other hard assets. CBRE’s Investment Management launched the IQ CBRE Real Assets ETF in May with the aim of offering protection against inflation in a rising interest rate environment.
Dan Foley, the portfolio manager of the ETF, stated on CNBC’s “ETF Edge” that there is a lack of options in this particular space within the ETF market. Foley sees significant opportunities arising from secular changes such as digital transformation, decarbonization, and market mispricing.
Foley emphasized that global financial institutions are already involved in the real asset space, and he believes retail investors should also take advantage. With attractive valuations and favorable conditions, Foley expects a strong total return in the future.
CBRE’s new ETF enters the market amidst the dominance of artificial intelligence (AI) companies and technology on Wall Street. Foley argues that hard assets provide crucial diversification from technology, especially given the hype around AI stocks. Furthermore, hard assets play a vital role in supporting the digital economy.
The fund’s top holdings, according to issuer New York Life Investments, include real estate and utility companies such as Public Storage, Crown Castle, Nextera Energy, and Equinix (EQIX), a leading data center provider. Equinix’s shares have risen by 7% in the past month.
Foley highlighted the importance of having world-leading assets like Equinix in the portfolio, as they are essential to the new economy. Despite launching on May 10, the IQ CBRE Real Assets ETF has experienced a decline of nearly 6%.
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