Wilmington Trust has changed the name and the strategy behind its Wilmington Multi-Manager Real Estate Securities Fund.
In order to hedge against inflation, the newly named Wilmington Multi-Manager Real Asset Fund will broaden its strategy to include a mix of Treasury inflation-protected securities (TIPS), real estate related securities such as real estate investment trusts
(REITs) and natural resources and commodities. Formerly, the fund focused only on real estate-related securities.
"The expanded charter of the Wilmington Multi-Manager Real Asset Fund will give shareholders greater diversification and a better weapon in the battle against inflation," said Neil Wolfson, Wilmington Trust Investment Management chief investment officer.
The reorganized fund's REIT holdings, which will account for between 20% and 60% of the portfolio, will include primarily commercial real estate, Wolfson said during a presentation in New York Tuesday. Between 25% and 75% of the fund will be dedicated to TIPS and between 0% and 35% to commodities, he said.
"While stocks have been an excellent hedge against inflation historically, real assets will also be important as investors strive to preserve the purchasing power of their portfolios over the long term," Wolfson said.
If inflation grows at 3% annually, $1 million invested today would be worth only $550,000 in 20 years.
"Incorporating real assets--those assets whose real returns are generally not influenced by the rate of inflation--into their portfolios is an important step investors can take to protect themselves against this threat," Wolfson said.