In an effort to provide investors with greater diversification, Prudential Investments has launched the Prudential Real Assets Fund, which will invest in real estate, metals, fuel and other commodities. In addition, the fund aims to protect investors against inflation and rising interest rates.

According to research, real assets outperform stocks and bonds during periods of rising interest rates. Ibbotson Associates found that when the Federal Research raised interest rates from 1% in June 2004 to 5.25% in June 2006, stocks rose 4.56% a year, bonds lost 0.34% but real asset rose 9.35%.

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