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Diversified Real Asset

Aiming to protect purchasing power with dynamic real asset exposure, a balanced risk profile, and a potentially more consistent outcome.

Diversified real asset strategy differentiators

  • Strategically allocates among real return and real asset securities, beyond TIPS, commodities, and REITs.

  • Blends multiple strategies to help mitigate undesired risk; designed to offer real return with lower-than-market volatility.

  • Specialist managers within each asset class seek to exploit opportunities and deliver a more consistent real asset outcome.

We seek to deliver a consistent real asset outcome

Providing diversified exposure to publicly listed real assets.

Infographic showing how real asset investments fit into (GDP) growth and (CPI) inflation

Source: Graphic is for illustrative purposes only and reflects the views of the management team. Gross Domestic Product (GDP): comprehensive measure of U.S. economic activity; measures the value of the final goods and services produced in the U.S. without double counting the intermediate goods and services used up to produce them. Consumer Price Index (CPI): measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

The opportunity for real asset investors.

Aerial view on country road through the green pine forest.

  • Enhance diversification through modest correlation and little overlap with a traditional balanced portfolio.

  • Increase total return potential because valuations may be more attractive compared to stocks across market cycles.

  • Protect purchasing power in environments when inflation is above trend.

What are real assets?

Public real assets are listed securities whose underlying value is tied to tangible assets that provide essential services or resources to the global economy. Real assets are goods and services people rely on in everyday life such as food, real estate, and energy. The value of real assets tends to rise as the cost of living goes up because they’re tied to the economy and consumer needs. Investing in a variety of real assets within your portfolio may help you fight the effects of inflation.

Global infrastructure

  • The building of railways, streets, power stations, and municipal services. Cash flows into global infrastructure investments are commonly linked to measures of economic growth and inflation.
Tractor spraying fertilizer on a green field.

Commodities

  • Raw materials that can be bought and sold, like coffee or cotton. As the prices of commodities rise, a direct investment in commodities would also be expected to increase. Prices tend to move with inflation, providing investors with a hedge as inflation increases.
Waste to energy plant producing electricity from city waste.

Natural resources

  • Are closely linked to commodities, like oil or timber. Natural resource stocks with operations directly linked to a specific commodity may benefit from the higher cost of that commodity.
Skyscrapers in downtown area, bottom view.

Global real estate investment trusts

  • Companies that own and collect rents from commercial and office buildings. Rents tend to be tied to local inflation levels, providing investors with a hedge as inflation increases.

Strategy facts

  • Manager

    Principal Asset Allocation

  • Inception

    1 April 2010

  • Index

    Diversified Real Asset Index (Linked)

  • Targeted number of issuers

    n/a

  • Expected turnover

    n/a

  • Investment vehicles

    CIT, U.S. Mutual Fund

Portfolio management

Principal Asset Allocation

Asset allocation views that are grounded in industry insights inform our portfolio construction process. Our team seeks to deliver competitive performance, tailored to your desired outcomes for risk, return, and income potential.

Portfolio Manager
Jessica Bush, CFA
22 years of experience
Portfolio Manager
Ben Rotenberg, CFA, CAIA
30 years of experience
Managing Director, Portfolio Manager
May Tong, CFA
22 years of experience
Learn more

Get the latest insights.

Effective January 1, 2022, the Diversified Real Asset Index (Linked) blend is 15% Bloomberg U.S. Treasury TIPS Index, 30% S&P Global Infrastructure Index, 15% S&P Global Natural Resources Index, 15% Bloomberg Commodity Index, and 25% FTSE EPRA/NAREIT Developed Markets Index. Prior to January 1, 2022, the blend consisted of 35% Bloomberg U.S. Treasury TIPS Index, 20% S&P Global Infrastructure Index, 20% S&P Global Natural Resources Index, 15% Bloomberg Commodity Index, and 10% FTSE EPRA/NAREIT Developed Markets Index.

Past performance does not guarantee future results.

Investing involves risk, including possible loss of principal.

Asset allocation and diversification do not ensure a profit or protect against a loss.

There is no guarantee that any risk mitigation strategy will be successful protect against a loss in down markets.

Not all investment options are available in all jurisdictions. Certain vehicles have not been registered with the United States Securities and Exchange Commission under the United States Securities Act of 1933 and may not be directly or indirectly offered or sold in the United States or to any United States person.

Principal Asset Allocation is an investment team within Principal Global Investors.