ETF Securities Portfolio Insights – The potential benefits of real assets in a portfolio
Highlights
Up 1.4% since the end of 2015, the surge in US inflation benefitted most to commodities, up 16.3% on average, followed by natural resources stocks with 6.2%.
Following its rally in 2017, the upside potential of equities is questioned for 2018. Our simulated real asset portfolio allows for higher diversification and lower downside risk.
Based on historic simulations, an allocation of 20% in the real asset portfolio from a portfolio of 60% equities and 40% bonds increased the Sharpe ratio to 0.58 from 0.54 for the 60/40 benchmark.
In November 2016, we published an article showing how a portfolio of real assets would benefit from a rising inflation environment and improve the Sharpe ratio of a traditional portfolio of equities and bonds. In this note, we are looking back at how the simulated portfolio has performed and provide an analysis of the inflation situation for the year ahead.
Inflation over the past two years
Headline inflations for the US, UK and EU jumped by 1.8% on average since the end of 2015, with the UK reaching the highest level at 3% in December 2017. Core inflations, on the other hand, were mixed. In the UK, core inflation rose 1.1% since December 2015 while EU core inflation was flat and US core inflation fell. This highlights the substantial contribution of the food and energy component in the headline inflationrally, up 1.7% for the UK and the US and 1.2% for the EU.
So far, out of the major central banks, only the US Federal Reserve (Fed) has started tightening its monetary policy and increase interest rates. The European Central Bank (ECB) and Bank of England (BOE) remain on a wait and see mode as both economies remain subject to substantial uncertainties amidst Brexit. While markets have priced in the Fed’s three rate hikes for 2018, we believe they are still underestimating the potential of a policy mistake in a situation where US inflation overshoots and the economy overheats. With inflation in the US, UK and EU highly correlated to each other, we believe headline inflation will likely stabilise around their current levels for 2018.
Interestingly, half of the top 20 performers since the end of 2015 are equity stocks while the other half, with the exception of one, belongs to commodities and more specifically metals for the most part. Mining stocks have seen the best performance, up 133% non-annualised, followed by palladium (90%) and the basket of industrial metals (56%). Miners saw their earnings rise again after mid-2016. Capex growth also turned positive, potentially signalling the beginning of a new business cycle that could last for the next two to three years.
However, data since 1991 show that…
Among the real assets that perform best when US, EU and UK inflation rises, commodities represent nearly 40%, while infrastructure and real estate represent 30% and 17% respectively. Natural resources stocks and inflation-linked bonds making up for the remaining 13%.
Interestingly, the same analysis with EU inflation shows that inflation benefits mostly to infrastructure and real estate assets while rising UK inflation would push inflation-linked bonds to the top five.
The simulated real asset portfolio
The real asset portfolio we created in November 2016 has 10 constituents weighted equally: 3 baskets of commodities (broad, energy and agriculture), gold, platinum, global REITs and global real estate stocks, US energy MLPs, global infrastructure stocks and cash.
Since November 2016, the simulated real assets portfolio continues to lead inflation as illustrated below. Recent trend of the portfolio returns suggests that the inflationrally is likely over, remaining around its current level in the near term.
Equity as an asset class had an strong year in 2017, supported by positive economic data across the world and there are several indicators that the market has confidence that it will continue. The MSCI World index, used as a proxy for equities, rose by 33% since the end of 2015 compared to 7.7% for the bond index (the Barclays Capital Global Bond) and 17% for the simulated real assets portfolio. We, however, observe that overall, the real assets portfolio is less volatile than the MSCI World index and therefore has a better risk-adjusted return of 0.34 versus 0.30 for the equity index.
Starting from January 2018, we are replacing the basket of agriculture with the basket of industrial metals in order to reflect our bullish view on the sector for 2018. We had our call right for 2017 and we believe that metals with industrial applications will continue to benefit from rising economic activities across the world and more specifically from emerging markets.
Real assets contribution to a simulated portfolio of equities and bonds
As a reminder, by adding 20% of a portfolio of 60% equities and 40% bonds in the simulated real assets portfolio, the resulting simulated portfolio with real assets has 50% in equities, 30% in bonds, 10% in commodities, 4% in real estate, 4% in infrastructure and 2% in cash. Both portfolios rebalance once a year in January.
Following the recent equity rally, the simulated portfolio with real assets is underperforming the 60/40 benchmark by 0.2% per year since 2006. It is, however, less volatile, provides better protection from the downside risk and recovers faster to its previous peak. As a result, the simulated portfolio with 20% in real assets is better diversified than the benchmark, improving the Sharpe ratio from 0.54 with the 60/40 benchmark to 0.58
European thematic UCITS ETFs posted a dramatic resurgence in the first half of 2025, with net inflows of $8.73 billion year-to-date, according to ARK Invest Europe’s latest quarterly update detailing H1 2025 European thematic ETF flows.
The turnaround marks a decisive reversal from the muted flows of 2024 ($308 million net outflows for the whole of 2024), as investors rotate back into forward-looking, innovation-driven themes with clearer earnings visibility.
Defence remains the dominant thematic allocation, capturing $7.87 billion in combined net inflows between Global ($4.81 billion) and European ($3.05 billion) defence ETFs underscoring its evolution from a tactical trade to a structural portfolio allocation. Maintaining its position as the defining technological theme, AI ETFs saw $904 million in net inflows, with investor appetite fuelled by relentless innovation in large language models, robotics, and autonomous systems.
In the same period, Cybersecurity ETFs continued to rebuild momentum after significant outflows in 2024 ($311 million net outflows for H1 2024), drawing $318 million, reflecting growing investor conviction in cybersecurity as a structural necessity amid rising digital threats.
Clean Energy ETFs saw outflows of $307 million. As policy momentum stalls in key markets, investors are increasingly selective within the energy transition space. Capital is rotating toward subsectors with clearer economic moats, such as nuclear and grid infrastructure. Supporting this sentiment, Uranium ETFs rank fifth at $253 million, reflecting growing investor interest in the nuclear sector as a potential solution to global energy needs.
Healthcare Innovation ETFs recorded net outflows of $279 million. The drawdown reveals investor caution around legacy biotech firms with uncertain drug pipelines and reimbursement risks. Interest is shifting toward AI-driven healthcare platforms offering faster innovation cycles and more scalable business models.
Electric Vehicles and Battery Tech ETFs saw net outflows of $203 million as investor enthusiasm cools amid subsidy rollbacks and plateauing EV demand in major markets. Persistent concerns around battery raw materials and production bottlenecks have further weighed on the theme.
Rahul Bhushan says, “After a cautious 2024, it’s evident that investors are re-engaging with innovation themes that offer clearer earnings visibility and resilience in an increasingly complex macro landscape. We’re seeing investor conviction in megatrends with structural tailwinds, particularly defence, AI, and energy security. Thematics are no longer just tactical bets, they’re core strategic exposures.”
2025/2024 Comparative Study
Thematics are back
After a weak 2024, investor appetite for thematic risk has returned in force:
• H1 2025 total net inflows: +$8.74B
• That’s a sharp reversal from -$791M in H2 2024 and only +$483M in H1 2024
• The rotation is clear: capital is moving back into forward-looking themes with stronger earnings visibility.
Defence is now a structural trade
• Global and Europe Defence saw a combined $7.87B in inflows in H1 2025 and $1.59B in June alone.
• This continues a multi-quarter surge as geopolitical tensions, rising military budgets, and renewed industrial policy drive long-term allocations.
• Defence is no longer a tactical trade—it’s becoming a core exposure.
AI inflows normalise, but conviction remains
• Artificial Intelligence ETFs drew $904M in H1 2025, following $1.47B in H1 2024.
• Inflows may be slowing, but investor conviction is holding firm.
• With earnings delivery now catching up to narrative, AI remains a centrepiece of thematic portfolios.
Cybersecurity shows signs of stabilisation
After brutal outflows in 2024 (-$311M H1, -$260M H2), cybersecurity ETFs finally saw inflows:
• $318M in H1 2025, including $67M in June.
• This rebound suggests investors are once again prioritising digital resilience in an AI-driven world.
Infrastructure themes are quietly regaining traction
• Global and Europe Infrastructure ETFs pulled in $284M in H1 2025, following modest gains in H2 2024.
• Infrastructure is benefiting from government stimulus, defence modernisation, and the reshoring trade.
Uranium’s steady climb continues
• $253M in H1 2025, after $216M in H2 2024 and $67M in June alone.
• Indeed, the $67M in June alone nearly matches the $66M pulled in during the entirety of H1 2024.
• A rare clean energy theme that’s bucking the downtrend, reflecting growing recognition of nuclear as a pragmatic decarbonisation solution.
Clean Energy sentiment is so bad, it might be investable
• Outflows across all periods: -$307M (H1 2025), -$505M (H2 2024), -$409M (H1 2024)
• June 2025: A mere -$8M
• Sentiment is arguably as negative as it’s ever been—yet structural drivers remain in place. The setup for a contrarian rebound is building.
About ARK Invest Europe
ARK Invest International Ltd (”ARK Invest Europe”) is a specialist thematic ETF issuer offering investors access to a unique blend of active and index strategies focused on disruptive innovation and sustainability. Established following the acquisition of Rize ETF in September 2023 by ARK Investment Management LLC, ARK Invest Europe builds on over 40 years of expertise in identifying and investing in innovations that align financial performance with positive global impact.
Through its innovation pillar and the ”ARK” range of ETFs, ARK Invest focuses on companies leading and benefiting from transformative cross-sector innovations, including robotics, energy storage, multiomic sequencing, artificial intelligence, and blockchain technology. Meanwhile, its sustainability pillar, represented by the ”Rize by ARK Invest” range of ETFs, prioritises investment opportunities that reconcile growth with sustainability, advancing solutions that fuel prosperity while promoting environmental and social progress.
Headquartered in London, United Kingdom, ARK Invest Europe is dedicated to empowering investors with purposeful investment opportunities. For more information, please visit https://europe.ark-funds.com/
UBS Asset Management planerar att erbjuda ett utbud av aktiva ETFer som utnyttjar deras differentierade räntebärande kapacitet, följt senare av en serie avkastningsfokuserade ETFer med optionsöverlägg.
Den första som lanseras idag ger tillgång till den aktiva förvaltningsexpertisen hos UBS AMs Credit Investments Group (CIG), en av de ledande förvaltarna av collateralized loan obligations globalt.
Den nya UBS EUR AAA CLO UCITSETF erbjuder investerare exponering mot den högsta kreditkvaliteten inom CLO-strukturen i ett likvidt och kostnadseffektivt omslag.
UBS Asset Management (UBS AM) tillkännager idag lanseringen av sin första aktivt förvaltade ETF, som ger kostnadseffektiv exponering mot de högst rankade trancherna av marknaden för collateralized loan obligation (”CLO”). UBS EUR AAA CLO UCITSETF kombinerar den aktiva förvaltningsexpertisen hos UBS AMs Credit Investments Group med skalan hos deras väletablerade ETF-erbjudande.
André Mueller, chef för kundtäckning på UBS Asset Management, sa: ”CLOer erbjuder stark avkastningspotential och diversifieringsfördelar. Att navigera på denna marknad kräver dock förståelse för CLO-strukturer, regleringar och riskerna i denna sektor. Vi har kombinerat mer än 20 års ETF-innovation med expertisen hos vår Credit Investments Group för att effektivt och transparent tillhandahålla de högst rankade CLO-värdepapperen. Den aktiva förvaltningsdelen erbjuder kostnadseffektiv exponering med potential att överträffa.”
John Popp, chef för Credit Investments Group på UBS Asset Management, tillade: ”Vi är glada att kunna erbjuda vår expertis inom hantering av CLO-trancher i över två decennier till en bredare investerarbas. Vårt teams djupa kreditkunskap och meritlista genom flera kreditcykler gör oss väl positionerade för att tillhandahålla övertygande investeringar. På dagens marknad anser vi att AAA CLO-skulder erbjuder en attraktiv risk-avkastningsprofil. Att erbjuda denna investering via en ETF kommer att utöka tillgången till denna växande marknad.”
Den aktiva UBS EUR AAA CLO UCITSETF* erbjuder tillgång till den växande CLO-marknaden genom en likvid och kostnadseffektiv ETF-struktur, vilket innebär:
Förbättrad avkastningspotential med strukturellt skydd – AAA CLOer erbjuder högre avkastning jämfört med liknande rankade investeringar, med strukturella egenskaper som har testats genom cykler, utan fallissemang ens under perioder av ekonomisk kris**
Portföljdiversifiering – tillgångsslagets rörliga ränta ger betydande diversifieringspotential i samband med en bredare ränteportfölj
Aktiv fördel – Credit Investments Group, en av de främsta förvaltarna av säkerställda låneförpliktelser globalt, hanterar dynamiskt risk och avkastning för att fånga marknadsmöjligheter
ETF-effektivitet – ETF-strukturen möjliggör likviditet och kostnadseffektiv tillgång till denna komplexa tillgångsklass
*Fonden är registrerad för försäljning i Österrike, Schweiz, Tyskland, Danmark, Spanien, Finland, Frankrike, Irland, Italien, Liechtenstein, Luxemburg, Nederländerna, Norge och Sverige.
**S&P Global Ratings, “Default, Transition, and Recovery: 2023 Annual Global Leveraged Loan CLO Default and Rating Transition Study”, 27 juni 2024
iShares Asia ex Japan Equity Enhanced Active UCITSETF USD (Acc) (AZEH ETF) med ISIN IE000D5R9C23, är en aktivt förvaltad ETF.
Den börshandlade fonden investerar minst 70 procent i aktier från Asien (exklusive Japan). Upp till 30 procent av tillgångarna kan placeras i private equity-instrument, värdepapper med fast ränta med investment grade-rating och penningmarknadsinstrument. Värdepapper väljs utifrån hållbarhetskriterier och en kvantitativ investeringsmodell.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,30 % p.a. iShares Asia ex Japan Equity Enhanced Active UCITSETF USD (Acc) är den enda ETF som följer iShares Asia ex Japan Equity Enhanced Active-index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.
iShares Asia ex Japan Equity Enhanced Active UCITSETF USD (Acc) är en mycket liten ETF med 9 miljoner euro förvaltade tillgångar. ETFen lanserades den 31 juli 2024 och har sin hemvist i Irland.
Investeringsmål
Fonden förvaltas aktivt och syftar till att uppnå långsiktig kapitaltillväxt på din investering, med hänvisning till MSCI AC Asia ex Japan Index (”Riktmärket”) för avkastning.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.