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New VT Elston Liquid Real Assets Index Fund launched to provide inflation protection


The UK’s portfolio provider Elston has announced the launch of a new fund tracking the Elston Liquid Real Assets Index.

The VT Elston Liquid Real Assets Index Fund aims to track the performance of the Elston Liquid Real Asset Index. The index was launched earlier this year and represents a basket of a diverse range of liquid instruments representing higher risk real asset classes which have the potential to mitigate inflation risk, as well as lower risk interest-rate sensitive assets, to mitigate interest rate risk.

Liquid real assets includes listed property securities, listed infrastructure securities, asset-backed securities, natural resources (such as energy, water, and timber-related securities), gold, and an equal-weight commodity basket including energy, agriculture, precious metals and industrial metals. The index is constructed using established, large, Exchange Traded Products representing these asset classes for liquidity, efficiency and diversification. With the exception of commodities, the ETFs within the index are all physically replicated.

The firm writes that by providing a broad range of real asset exposures using highly liquid instruments, there are fewer size or trading constraints when accessing these exposures. Furthermore, by delivering the strategy in a unitised fund format enables trading efficiency within the fund as well as easier platform connectivity.

Commenting on the launch, Henry Cobbe, Head of Research at Elston Consulting, which created the index tracked by the fund, says: “We are seeing a lot of interest from advisers who want to incorporate real asset exposures to protect against inflation but don’t want to exceed the risk budget for each portfolio. This broadly diversified, lower volatility approach to liquid real assets makes sense with inflation on the rise. Having this delivered as a unitised fund is a convenient format for advisers running portfolios on platforms.”

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