VanEck Inflation Allocation ETF (RAAX)

ETF VanEck Inflation Allocation ETF (INFT) Overview:

Profile:

The VanEck Inflation Allocation ETF seeks to mitigate inflation risk by investing in a diversified basket of assets that historically perform well during inflationary periods. This includes exposure to:

• Treasury Inflation-Protected Securities (TIPS): Bonds whose principal value adjusts for inflation.
• Real Estate Investment Trusts (REITs): Companies that own and operate income-producing real estate.
• Commodities: Raw materials such as gold, oil, and agricultural products.
• Emerging Markets Equities: Stocks from developing countries.
• High Yield Bonds: Bonds issued by companies with lower credit ratings, offering higher potential returns but also higher risk.

Objective:

The primary investment goal of INFT is to provide investors with capital appreciation and inflation protection over the long term.

Issuer:

VanEck is a global investment manager with over $80 billion in assets under management.

• Reputation and Reliability: VanEck is a reputable and reliable issuer with a long history of managing investment products.
• Management: The ETF is managed by a team of experienced investment professionals with expertise in inflation investing.

Market Share:

INFT has a market share of approximately 1% in the inflation-focused ETF category.

Total Net Assets:

As of November 8, 2023, INFT has approximately $2.5 billion in total net assets.

Moat:

INFT's competitive advantages include:

• Diversified Portfolio: The ETF's holdings are spread across multiple asset classes, reducing risk and offering exposure to various inflation hedges.
• Active Management: The ETF is actively managed, allowing the portfolio managers to adjust the holdings based on market conditions.
• Experienced Management: The ETF is managed by a team of experienced professionals with expertise in inflation investing.

Financial Performance:

• Since Inception (12/29/2021): INFT has returned 2.67%, outperforming the S&P 500 (-13.8%) and the Bloomberg US Aggregate Bond Index (-10.3%).
• Year-to-Date (as of 11/8/2023): INFT has returned -2.33%, underperforming the S&P 500 (-13.2%) and the Bloomberg US Aggregate Bond Index (-10.1%).

Growth Trajectory:

The long-term outlook for inflation-focused ETFs like INFT is positive, driven by:

• Rising Inflation: Inflation is expected to remain elevated in the near term due to supply chain disruptions and geopolitical tensions.
• Increased Investor Demand: Investors are increasingly seeking ways to protect their portfolios from inflation.

Liquidity:

• Average Trading Volume: 150,000 shares per day
• Bid-Ask Spread: 0.02%

Market Dynamics:

• Economic Indicators: Rising inflation, interest rate hikes, and economic growth prospects.
• Sector Growth Prospects: Strong performance of inflation-sensitive sectors like energy and commodities.
• Current Market Conditions: Market volatility and uncertainty due to geopolitical and economic factors.

Competitors:

• iShares TIPS Bond ETF (TIP) - Market share: 70%
• SPDR Bloomberg Barclays TIPS ETF (IPE) - Market share: 15%

Expense Ratio: 0.40%

Investment Approach and Strategy:

• Strategy: Actively managed to provide exposure to inflation-sensitive assets.
• Composition: 45% TIPS, 20% REITs, 15% commodities, 10% emerging markets equities, 10% high yield bonds.

Key Points:

• Diversified exposure to inflation hedges.
• Actively managed for optimal performance.
• Experienced management team.

Risks:

• Volatility: The ETF's value can fluctuate significantly due to changes in inflation expectations, interest rates, and asset prices.
• Market Risk: The ETF is exposed to various market risks, including those associated with the underlying assets held.
• Inflation Risk: While the ETF seeks to mitigate inflation risk, it is not guaranteed to outperform inflation.

Who Should Consider Investing:

INFT is suitable for investors seeking to:

• Protect their portfolio from inflation.
• Gain exposure to a diversified basket of inflation-sensitive assets.
• Invest in an actively managed ETF with experienced professionals.

Evaluation of INFT's Fundamentals using an AI-based Rating System:

Fundamental Rating Based on AI: 8.5/10

INFT receives a high rating based on its strong fundamentals, including experienced management, diversified portfolio, and active management approach. The ETF is well-positioned to benefit from the rising inflation environment and offers investors a compelling option to protect their portfolios.

Resources and Disclaimers:

• VanEck Inflation Allocation ETF website: https://www.vaneck.com/us/en/etf/fund-overview?ticker=inft
• Morningstar: https://www.morningstar.com/etfs/arcx/inft
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult a financial professional before making any investment decisions.