Hard assets like commodities are known to be a good hedge against inflation, but how do you decide how much to be in gold, oil, or real estate? In today's volatile macroeconomic environment, it's an important but difficult question.
The VanEck Real Assets exchange-traded fund does the allocating to hard assets for you. The $1.4 billion ETF has delivered a stellar 11.5% five-year annualized return, versus the 7.5% average of its peers in Morningstar's moderately aggressive allocation fund category. It has performed well during inflationary panics, rising 1.8% in 2022 when the S&P 500 fell 18.1%, and it fell significantly less during the tariff panic in 2025. It has a 0.55% expense ratio -- reasonable for an actively managed fund.
"Our objective with this strategy is to deliver the most complete real-asset solution possible in a balanced and risk-managed way," lead manager David Schassler says. To do that, Schassler and co-manager John Lau employ quantitative indicators that track the price trends of commodities and other real assets, macroeconomic data, and underlying investor sentiment to determine their asset targets.
Rather than relying on static long-term allocations, Schassler invests in three main asset buckets, with flexible exposure ranges depending on the market and economic environment. The "growth assets" bucket, which includes commodity futures and natural-resource equities, does well when economies are growing and products like oil and industrial metals are needed to build and operate factories and equipment. This can range from 30% to 60% of the ETF's portfolio, and is currently 40%.
Such natural resources, Schassler argues, are necessary for the massive artificial-intelligence buildout that is driving global growth. In addition to holding energy equity stakes in oil refiners like Marathon Petroleum and Valero Energy, the fund gains direct commodity exposure via futures contracts. It currently has a 26% weighting in VanEck Commodity Strategy, a futures-driven ETF that Schassler also manages successfully, having beaten 99% of his peers in Morningstar's commodities broad basket category in the past five years.
Futures can provide returns not just via commodity exposure but also through astute positioning on their expiration-date curves, which resemble bond yield curves. Schassler often sells an expiring near-term futures contract at a high price and uses the proceeds to buy a cheaper, longer-dated futures contract. The spread between the two prices is called a "roll yield." This adds to the fund's return and helps to avoid short-term commodity price disruptions, as the shortest-dated front-month futures are the most sensitive to a commodity's current spot price. Schassler will also adjust the expiration date exposure of contracts depending on his bullishness or defensiveness on particular commodities.
Thus, though the underlying commodity ETF is currently 55% in energy futures, lately Schassler has been buying back-month contracts, which are less sensitive to oil prices, in anticipation of the Iran war ending and oil prices finally coming down. He has also diversified the fund's energy futures beyond crude into refined oil, natural gas, diesel, and heating fuel, each of which has different sensitivities to the macroeconomic backdrop.
The "income-producing assets" bucket, currently 36% of the Real Asset ETF's portfolio, can range from 15% to 50% and includes master limited partnerships, infrastructure stocks, utilities, and real estate investment trusts. Schassler is less interested in individual stocks within these industries than in owning baskets of stocks of the largest, most reputable companies in them, and adjusting his overall weightings to these baskets based on market conditions. His largest income industry weighting recently was 8.2% in energy pipeline MLPs like Enterprise Products Partners, while REITs like Welltower were the smallest at only 2.8%.
"If we went to a different, more bearish regime, you would expect us to naturally pivot toward REITs, potentially utilities, and infrastructure," Schassler notes. Conversely, in an inflationary environment driven by supply shocks, the playbook shifts. Rising inflation devalues fixed income and compresses equity multiples across traditionally defensive segments like REITs, while MLP oil and natural-gas pipelines see surging revenue.
Although the ETF will probably take some short-term lumps if the war in Iran ends and oil falls, Schassler actually thinks it would be good for his long-term AI-driven growth narrative. If oil is priced too high, it will stymie that growth. A decline in inflation and interest rates will also benefit the income-oriented portion of the fund, as these assets are competing with bonds that offer elevated interest rates because of the war.
"Higher energy prices at the levels that we're talking about create demand destruction," Schassler says. "In addition, upward pressure on inflation puts upward pressure on interest rates. The expectation [if oil prices fall] would be that we would lose money on the commodities, and we'd make money in a lot of other places. "
One area that would benefit from falling oil and interest rates is gold. The precious metal pays no income, so investors will often opt for bonds instead of gold when real inflation-adjusted rates are high on bonds, like today. Gold and cash fall into the ETF's "capital preservation" bucket, which can range from 15% to 30% of the portfolio and is currently 23%. Bullion itself, which the ETF owns via its position in the VanEck Merk Gold ETF, is 18%.
"Gold is the original store-of-value asset," Schassler says. "During periods of financial excess, during periods of [currency] debasement, during periods of persistent and elevated inflation like what we've been experiencing now for the past five years, that embedded scarcity really comes to life."
Yet like everything else, Schassler will adjust his gold position based on market conditions. Bullion got as high as 24% of the ETF by the end of 2025, but Schassler cut it back to add to oil and other commodities before the Iran war started this year. "Gold was structurally overbought," he says. "It was performing exceptionally well, and was encompassing more and more of our total risk budget. So, we reallocated from gold to energy, which we were structurally underweight."
Having that nuanced and balanced approach toward real assets is what makes this ETF so useful as a diversification tool.
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