PGIM explores how a diversified real asset portfolio can deliver inflation protection and more resilient returns across cycles. The paper argues that combining commodities, real estate, and infrastructure may improve outcomes, challenging traditional 60/40 portfolios, especially in inflationary regimes where real assets have historically outperformed financial assets.
What’s In Your Real Asset Portfolio?
PGIM
Harsh Parikh
Research
16 Pages
Key Takeaways
Inflation Hedging Benefit: Real assets showed positive returns in 70%+ of inflationary periods, outperforming stocks and bonds during rising CPI environments.
Diversification Impact: A multi-asset portfolio reduced volatility by roughly 20% compared to standalone commodities while maintaining comparable return profiles.
Allocation Ranges Matter: Optimal portfolios often included 30%–50% real assets, improving risk-adjusted returns versus traditional allocations over multi-decade periods.
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