Real Asset strategy

Real Asset strategy

Real assets
See real assets through a new lens

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

Bar graph comparing Real estate, Infrastructure, Commodities, U.S. bonds, and U.S. equities total returns during periods of rising inflation.

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

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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 2022.

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FS Chiron Real Development Fund

Overall Morningstar ratingTM: ★★★★

Based on the risk-adjusted returns for Class I out of 382 funds in the Morningstar Global Allocation category as of 11/30/2023.1

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. © 2023 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 382 funds in the Morningstar Global Allocation category and received four stars.

Morningstar ratings are specific metrics of performance and do not represent absolute performance of any fund. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance, placing more emphasis on downward variations and rewarding consistent performance. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. The top 10% of funds in each 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 fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. The Fund’s other share classes may have different performance characteristics.