Real Asset strategy

Real Asset strategy

Education > Know your alternatives > Strategies > Real assets


Real assets

See real assets through a new lens


Solar panels

Real assets are evolving

Secular changes from 21st century modernization require a reinvigorated approach to real asset investing.1

With rising demand for sectors such as sustainable energy, modern technology and agile real estate, a new class of real assets has emerged alongside the traditional. Strategically combining these two versatile categories offers a cutting-edge framework for investing in real assets today.

The challenge

Today’s investors face a rapidly changing, unpredictable market environment. High inflation and rising rates are leading investors to seek solutions outside of the traditional portfolio. Real assets may help investors overcome this challenge, as they have historically delivered strong total returns during periods of rising inflation, and offer a potential haven in changing economic cycles. This high degree of inflation sensitivity has historically resulted in strong outperformance relative to bonds and equities.

Total returns during periods of rising inflation2

Past performance is not indicative of future results.

View disclosures

Source: Bloomberg Finance L.P., as of September 30, 2022. Period is from 2002 to September 2022, based on availability of MSCI World Infrastructure Index (The MSCI World Infrastructure Index captures the global opportunity set of companies that are owners or operators of infrastructure assets). Rising periods of inflation include all periods when CPI rose above the mean by one standard deviation or more. Real estate is represented by the NCRIEF ODCE Index (The Open-End Diversified Core Equity Index, often referred as the ODCE, is a core capitalization-weighted index that includes only open-end diversified core strategy funds with at least 95% of their investments in U.S. markets). Infrastructure is represented by the MSCI World Infrastructure Index. Commodities are represented by the Bloomberg Commodities Index (Bloomberg Commodity Index is calculated on an excess return basis and reflects commodity futures price movements. The index rebalances annually weighted 2/3 by trading volume and 1/3 by world production and weightcaps are applied at the commodity, sector and group level for diversification). U.S. Bonds are represented by the Bloomberg U.S. Aggregate Bond Index (The Bloomberg U.S. Aggregate Bond Index, or the Agg, is a broad base, market capitalization-weighted bond market index representing intermediate term investment grade bonds traded in the United States). U.S. equities are represented by the S&P 500 Index (The Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S.).

Our strategic approach

The opportunity

Many burgeoning sectors in today’s world will likely prevail for the long term and drive economic growth in the coming years. Next generation real assets have created opportunity for investors to keep pace with a rapidly changing macroeconomic environment, and when positioned alongside traditional real assets, offer potential for inflation-sensitive returns across global markets.

Reframing the real asset landscape

FS Chiron Funds CIO Ryan Caldwell breaks down how we see the world of real assets, combining the traditional universe with a next generation set of real assets as well.

Our solution

Investors cannot simply abandon traditional real assets for those of the modern world. Investing in such a strategy today requires a thoughtful, strategic combination of both the traditional and next generation sectors within each real asset category. At FS Investments, we carefully examine opportunity across infrastructure, energy, real estate and commodities to create a full cycle real asset solution.

Diagram describing examples of traditional and next generation real assets.

Why choose FS Investments

At FS Investments, we are leveraging innovative investment approaches to equip investors with a real asset portfolio that captures secular trends in our economy.

With our in-house team of experts, led by Ryan Caldwell and Scott Burr, we deploy a combination of innovative quantitative modeling with a research-based fundamental approach to navigate the vast array of traditional and next generation real assets available to investors. This approach allows investors to potentially capitalize on cyclical and secular changes in markets and generate potential for inflation-sensitive, differentiated returns.

FS Chiron Real Development Fund

FSRLX blends traditional and next generation real assets in a single strategy – offering a full cycle inflation solution with a global reach. Get to know a fund that redefines real asset investing, empowered by our proprietary quantamental approach.

Explore FSRLX

Related content

Strategy note

Considering all possible outcomes, stay flexible with alts

A new market update from Chief Market Strategist Troy Gayeski
Research report

The real world: A modern approach to real asset investing

Secular changes in our economy and elevated inflation demand not only a fresh look at real assets, but also a fresh definition.
Podcast

The 3D Report: Q3 2022 – Sympathy for the Devil

In this episode, FS Chiron Funds CIO Ryan Caldwell and Chief U.S. Economist Lara Rhame discuss the latest news and events shaping the global investment backdrop.

View important disclosures

Effective July 10, 2023, the Fund has been renamed FS Chiron Real Development Fund. Prior to that date, the Fund operated under the name FS Chiron Asset Fund.

An investment in FS Chiron Real Development Fund (the “Fund”) involves a high degree of risk and may be considered speculative. Investors are advised to consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The Fund’s prospectus contains this and other information about the Fund. Investors may obtain a copy of the Fund’s prospectus free of charge at www.fsinvestments.com or by phone at 877-924-4766. Investors should read and carefully consider all information found in the Fund’s prospectus and other reports filed with the U.S. Securities and Exchange Commission before investing.

RISK FACTORS

Investing in the Fund involves risk, including the risk that a shareholder may receive little or no return on their investment or that a shareholder may lose part or all of their investment. The Fund is subject to interest rate risk and will decline in value as interest rates rise. The Fund may engage in leveraging and other speculative investment practices that may increase the risk of loss of investment, and accelerate the velocity of potential losses. In addition to the normal risks associated with investing, international and emerging markets may involve risk of capital loss from unfavorable fluctuations in currency values, differences in generally accepted accounting principles or from social, economic, or political instability in other nations. The Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund’s gains or losses.

Investments in commodities are subject to higher volatility than more traditional investments. In addition to the normal risks associated with investing, REIT investments are subject to changes in local economic conditions, credit risk, possible lack of availability of financing and changes in interest rates or property values. Bitcoin futures contracts involve the risk that changes in their value may not move as expected relative to changes in the value of Bitcoin. Futures contracts exhibit “futures basis,” which refers to the difference between the current market value of Bitcoin (the “spot” price) and the price of the cash-settled Bitcoin futures contracts. As a result, the use of Bitcoin futures contracts involves risks that are in addition to, and potentially greater than, the risks of investing directly in securities and other more traditional assets, and may be considered a speculative investment. The Fund is classified as a “non-diversified” investment company, which means that the percentage of its assets that may be invested in the securities of a single issuer is not limited by the 1940 Act.

FS Chiron Real Development Fund is distributed by SEI Investments Distribution Co. (SIDCO), 1 Freedom Valley Drive, Oaks, PA 19456. SIDCO is not affiliated with Chiron Investment Management, LLC or FS Investment Solutions, LLC.

View footnotes + definitions

  • Real Assets is an investment asset class that covers investments in physical assets such as real estate, energy, and infrastructure. Real assets have an inherent physical worth. Real assets differ from financial assets in that financial assets get their value from a contractual right and are typically intangible.
  • Source: Bloomberg Finance L.P., as of September 30, 2022. Period is from 2002 to September 2024.

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

Any projections, forecasts and estimates contained herein are based upon certain assumptions that the author considers reasonable. Projections are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results. The inclusion of projections herein should not be regarded as a representation or guarantee regarding the reliability, accuracy or completeness of the information contained herein, and neither FS Investments nor the author are under any obligation to update or keep current such information.

All investing is subject to risk, including the possible loss of the money you invest.

Education

Get insights from Chief Market Strategist Troy Gayeski

Learn more

Investments

Explore our products

View our offerings

Search our site

FS Chiron Real Development Fund

Overall Morningstar ratingTM: ★★★★★

Based on the risk-adjusted returns for Class I out of 338 funds in the Morningstar Global Allocation category as of 6/30/2024.1

Effective July 10, 2023, the Fund has been renamed FS Chiron Real Development Fund. Prior to that date, the Fund operated under the name FS Chiron Asset Fund.

Access long-term growth trends in traditional and 21st-century real assets

The trend toward a more digital, sustainable world is secular and enduring. These changes bring immense opportunity to invest in the real assets that will power our lives for years to come.

Differentiated access

Blends traditional and next generation real assets and companies to capture strong total returns driven by cyclical and secular trends

Leading investment expertise

Utilizes the quantitative and fundamental research process that drives asset and security selection across the FS Chiron platform

Inflation sensitive

Offers a dynamic inflation solution through changing economic and inflationary cycles
Get started with FSRLX

1. ©2024 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For the three-year period, FS Chiron Real Development Fund Class I was rated against 338 funds in the Morningstar Global Allocation category and received four stars. For the five-year period, FS Chiron Real Development Fund Class I was rated against 320 funds in the Morningstar Global Allocation category and received five stars.

The Morningstar Rating™ for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity, variable life subaccounts, exchange-traded funds, closed-end funds and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales load. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five- and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36–59 months of total returns, 60% five-year rating/40% three-year rating for 60–119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.