With inflation levels the highest in 40 years and the Fed dramatically raising rates to combat inflation, institutional investors are increasingly recognizing the benefits of exposure to real assets, specifically focusing on natural resources, infrastructure and real estate. Though many investors believe we may have reached peak inflation levels, most agree that the transition back to the Fed's stated inflation target of 2% is a long way off. This has created a risk that inflation and subsequent Fed rate hikes may surprise to the upside for 2023.
In an increasingly volatile global market environment, real assets can offer what many investors are looking for: the potential for income, diversification and capital preservation, all while providing inflation protection. Thanks to product innovation within real asset sectors in recent years, investors now have access to a wide variety of investment vehicles and an unprecedented supply of opportunities.