The video provides a data-focused analysis of the “debasement trade,” defined as the decrease in a currency’s purchasing power due to an expanding money supply. The analysis centers on the “Real Assets” ETF category, which provides exposure to assets that may benefit from this inflationary trend, such as commodities and infrastructure.
The “Real Assets” category, a sub-set of “Asset Allocation Specialty,” is detailed as a small but growing space. Key data points include:
- Category Size: It contains 4 ETFs with approximately $1.4 billion in total assets under management (AUM).
- Category Performance: The category has seen an average year-to-date (YTD) return of 21%.
- Category Flows: The “Real Assets” category has attracted $608 million in YTD flows, more than doubling its AUM since the beginning of the year.
The video analyzes the primary ETFs in this category, looking at several key aspects:
- Performance: A comparison of year-to-date returns was made (e.g., PPI +28%, RAAX +21.5%, RLY +15%).
- Asset Class Exposure: A review of the funds’ mix of equities, fixed income, and “other” holdings.
- Sector Allocations: An examination of the equity holdings, which showed concentration in sectors like energy, industrials, materials, and utilities.
- Deep Dive on PPI: A specific analysis of the Astoria (PPI) fund revealed its composition: 84% in 67 stocks (with no fixed income) and 16% in “other” assets, including a gold ETF (GLDM) and Bitcoin.
The video concludes that “Real Assets” ETFs offer a way for investors to gain diversified exposure to the debasement theme within a single, tax-efficient fund structure.
Referenced Article
In the video, a reference was made to the following article, which discusses the “debasement trade” theme in detail.
- The Debasement Trade is Back and Astoria Was Ahead of the Curve – This article discusses the resurgence of investor interest in “real assets” such as gold, Bitcoin, and commodities. It defines this trade as a strategic response to concerns over the long-term purchasing power of the US dollar, which is being eroded by persistent fiscal deficits and inflation. The article suggests that a holistic portfolio of real assets—including gold, digital assets, infrastructure, and industrials—is a way to preserve wealth in “real terms.”
Disclosures
This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.
This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.
