In the face of record inflation, the Virtus Real Assets Income ETF (VRAI) has done extraordinarily well, up 19% year-to-date, and significantly beating the S&P 500, which is up 14%. On top of this, the ETF generates compelling income of 3%, well above the 10 Year US Treasuries at 1.5%.

Investing in real assets is a winning strategy in an inflationary environment because tangible assets such as real estate, natural resources and infrastructure have intrinsic value. VRAI is the first ETF focused on real assets. Additionally, because of VRAI’s focus on income-generating real assets, VRAI also generates attractive income.

In terms of ETF construction, VRAI is designed to be one-stop solution for real asset exposure. VRAI consists of 90 US-traded companies, equally divided between real assets, natural resources, and infrastructure. Companies are filtered based upon market capitalization and selected based upon dividend yield. All stocks are equally weighted to ensure portfolio diversification.

Finally, in terms of costs, VRAI is very competitively priced at 55 bps (0.55%). This stands stark contrast to most energy and real estate ETFs and mutual funds, which typically cost over 100 bps (or 1%).

For more information on the investment case, check out this research piece produced by Virtus

n.b. This is sponsored content and not FINSUM editorial

(Washington)

Earlier this month the DOL took a major step. On June 11th, as part of its annual regulatory agenda, the DOL announced that it would be broadening the scope of its fiduciary rule. In particular, the DOL is planning to broaden the ERISA definition of who counts as a fiduciary under the rule, which would mean more advisors are covered. According to leading industry lawyer Josh Lichtenstein, “There are a lot of career people at the DOL still working there and it's not clear to me that their views would have necessarily changed just because of the 5th Circuit's action … So I am expecting to see a pretty fulsome rewrite of the definition of who is a fiduciary”.

FINSUM: That is a pretty substantial comment from Mr. Lichtenstein, and not one most advisors want to hear. Stay tuned.

(Silicon Valley)

Venture capital has always been a hard-to-access asset class for advisors and their clients. The funds tend to have high minimums and long lock-up periods with extremely low liquidity. That said, returns are historically strong, and VC can often be an un-correlated asset class whose returns are differentiated in scope and timing from publicly-traded markets. Because of the lack of liquidity and easy access it has been an asset class that has largely been overlooked by advisors and high net worth individuals. However, there are some ways to access venture capital through liquid funds which are likely worth a look.

FINSUM: Not only can returns because excellent and uncorrelated, but VC is likely to become a more important asset class in the next few years. Why? Because more and more large companies are staying private for longer, which means investors need to ways to access the asset class in order to participate in the total return of the market.

(Washington)

Biden is going after the mother of all tax hikes, though it is deftly spread across a number of different areas so it takes significant effort to add it all up. That is partly by design, but partly by necessity, since the wealthy tend to face taxes across a number of different parts of their financial lives—income, capital gains, corporate taxes, inheritance. The reality though is that if you combine all of Biden’s proposals, wealthy individuals living in states with high income taxes (like New York) could face tax bills of over 80% when accounting for all the areas above. This would include a new top personal income tax rate, new higher corporate tax rates, the elimination of “step-up basis” in inheritance taxes (and potentially a higher inheritance tax rate), and state taxes of over 14% in New York.

FINSUM: This only precedents for this level of taxation in US history were during World War I and World War II, when tax rates got into the 90% percent range. Even then, though, there were easy loopholes and deductions to allow individuals to avoid that top rate.

Infrastructure investment has changed vastly in the last few years. Not only is the sector at...see the full story here