Talk Your Book: The Bull Market in Real Assets
Digest
This podcast episode delves into the compelling case for investing in real assets, moving beyond traditional bearish outlooks. Hosts Michael Batnick and Ben Carlson, joined by David Shassler of VanEck, discuss how innovation, particularly AI, is creating unprecedented demand for infrastructure and energy, thus driving the value of real assets. Shassler defines real assets into resource assets, those with embedded scarcity like gold, and income-generating assets. The VanEck Real Assets ETF (RAAX) is presented as a diversified fund of funds offering exposure to these segments. The discussion highlights a new economic regime characterized by technological advancement, increased money supply, and geopolitical shifts leading to de-dollarization, all of which favor assets with inherent scarcity. The episode also touches upon the bull market in gold and silver, the strategic portfolio construction of RAAX, and potential risks associated with AI capital expenditure. Ultimately, the conversation frames the current environment as a positive one for humanity, fueled by innovation and leading to rising living standards, with real assets playing a crucial role.
Outlines
Introduction to Real Assets and the RAAX ETF
The podcast opens with a sponsorship message for the VanEck Real Assets ETF (RAAX). Hosts Michael Batnick and Ben Carlson welcome listeners and provide a disclaimer. They then introduce the core topic: the case for real assets, particularly in the context of innovation and growth, rather than solely as a hedge against economic downturns. David Shassler from VanEck joins to discuss the RAAX ETF, defining real assets into resource assets, those with embedded scarcity like gold, and income-generating assets.
The New Economic Regime: AI, Infrastructure, and De-dollarization
Shassler argues that a new economic regime driven by extreme innovation, especially AI, necessitates significant investment in infrastructure and energy, boosting real assets. The discussion covers the bull market in real assets, influenced by increased money supply, inflation cycles, AI development, and geopolitical events impacting the dollar. The conversation touches on gold and silver's performance, de-dollarization trends, and the crucial link between infrastructure development for AI and energy needs.
Inflation, Fiat Currency, and Investment Strategy
The hosts and Shassler discuss the impact of inflation and the shift to a new economic regime where assets with scarcity perform well. They explore the concept of fiat abundance versus scarcity, benefiting assets like gold. Potential risks, such as excessive AI capital expenditure without immediate ROI, are considered. The accelerating nature of technological advancement and the need for infrastructure are highlighted. The episode also debates the current state of inflation and the reasons behind the rising demand for gold bullion, including protection against financial consequences and global diversification.
Conclusion and Further Information
The podcast concludes with a clarification that cryptocurrency is not considered a real asset by VanEck due to its lack of historical performance. Listeners are encouraged to visit VanEck.com for more information on RAAX and other offerings, and an email address is provided for feedback.
Keywords
VanEck Real Assets ETF (RAAX)
A diversified fund of funds managed by VanEck, providing exposure to various real asset segments like commodities, gold, infrastructure, and energy. It aims to offer a one-stop solution for investors seeking real asset allocation.
Real Assets
Tangible assets with intrinsic value, including commodities (gold, oil, metals), real estate, infrastructure, and natural resources. They are often seen as a hedge against inflation and currency devaluation due to their inherent scarcity.
Embedded Scarcity
A characteristic of assets, like gold, that have a limited supply and cannot be easily replicated or increased. This scarcity is a key driver of their value, especially during periods of fiat currency abundance or inflation.
AI and Infrastructure
The rapid development of Artificial Intelligence (AI) necessitates massive build-outs of data centers, energy, and supporting infrastructure. This demand for physical resources and energy directly benefits real assets.
De-dollarization
A global trend where countries seek to reduce their reliance on the US dollar as a primary reserve currency. This is driven by concerns over US monetary policy, geopolitical actions, and a desire for greater financial independence.
Fiat Abundance vs. Scarcity
A concept contrasting the increasing supply of fiat currencies (which can be printed by governments) with the limited supply of assets possessing inherent scarcity (like gold). This imbalance favors scarce assets.
Momentum and Mean Reversion
Investment strategies used in portfolio management. Momentum involves investing in assets that have shown strong recent performance, while mean reversion involves buying assets that have underperformed, expecting them to return to their average.
Gold Bull Market
A sustained period where the price of gold experiences significant and consistent increases. Historical gold bull markets have been driven by factors like inflation, currency debasement, and geopolitical uncertainty.
Q&A
What are the main categories of real assets discussed in the podcast?
The podcast categorizes real assets into three main buckets: resource assets (commodities and companies involved in their extraction/distribution), assets with embedded scarcity (like gold, the ultimate store of value), and income-generating real assets that provide a yield.
How does the development of AI impact the demand for real assets?
The rapid advancement of AI requires a significant build-out of infrastructure, including data centers and a massive increase in energy consumption. This increased demand for physical resources and energy directly drives the need for and value of real assets.
Why is VanEck's Real Assets ETF (RAAX) structured as a fund of funds?
The ETF is structured as a fund of funds to provide an efficient and comprehensive way for investors to gain exposure to various segments of the real assets market under a single ticker, acting as a one-stop shop for diversification within this asset class.
What is the primary driver behind the current bull market in real assets, according to the discussion?
The bull market is driven by a combination of factors including increased money supply post-COVID, a new economic regime favoring diversification, the massive infrastructure and energy needs for AI development, and global concerns about the US dollar's role as a reserve asset, leading to de-dollarization trends.
How does VanEck approach portfolio construction for the RAAX ETF?
The process involves identifying key real asset segments, using quantitative optimization to maximize diversification and minimize volatility, and employing strategies like riding momentum in performing assets and utilizing mean reversion for underperforming ones.
Is cryptocurrency considered a real asset by VanEck?
No, VanEck does not consider cryptocurrency a real asset. While acknowledging its embedded scarcity, they differentiate it from traditional real assets based on historical performance and unique return drivers, choosing not to include it in the RAAX ETF.
Show Notes
On this episode of Animal Spirits: Talk Your Book, Michael Batnick and Ben Carlson are joined by David Schassler from VanEck to discuss: the case for owning real assets, the gold bull market, how AI is fueling the demand for energy and materials and how the world will look different going forward.
Important Disclosures from VanEck: https://www.vaneck.com/us/en/talk-your-book-vaneck-disclosures-march-2026/
Find complete show notes on our blogs...
Ben Carlson’s A Wealth of Common Sense
Michael Batnick’s The Irrelevant Investor
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Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here:
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