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How to Diversify Your Portfolio With Real Assets

BY | ETF Database
9:53 am ET 10/13/26 | 25 VIEWS
With megacap tech driving extreme market concentration, traditional equity and fixed income portfolios face growing structural challenges. A recent SS&C ALPS Advisors webcast, Building Resilient Portfolios With Real Assets — moderated by TMX VettaFi’s Roxanna Islam alongside experts Carl Zeller and Richard Baker — demonstrated how incorporating real assets can help diversify your portfolio.Key Takeaways Allocation Deficit: 50% of surveyed advisors allocate <5% to real assets, compared to 13-14% in institutional portfolios. Concentration Risk: Technology accounts for ~38% of the S&P 500, highlighting the need for physical asset diversification. Model Impact: A 10-20% allocation to real assets improved yields, shifted inflation beta positive, and enhanced Sharpe ratios. Navigating Inflation & Market ConcentrationA handful of large companies now account for a significant share of the U.S. stock market, meaning your portfolio could be less diversified than it looks. At the same time, rising prices can eat away at the value of your money, while bonds may struggle to keep pace with inflation. This makes the traditional mix of 60% stocks and 40% bonds harder to rely on as a one-size-fits-all investment strategy. As demand grows for AI infrastructure, modern electricity grids, and local manufacturing, physical assets could play an increasingly important role in the economy. Adding real assets to a portfolio can help spread risk beyond stocks and bonds, create additional income opportunities, and offer some protection against inflation. They aren’t without risks, but they can be worth considering if you’re looking to build a more balanced portfolio for the long term.How Much Are Advisors Actually Investing in Real Assets?Real assets may offer a way to spread investment risk beyond stocks and bonds, but how much are financial advisors actually investing in them? The results of a webcast poll suggest there’s room for growth. Half of the advisors surveyed said they allocate less than 5% of their portfolios to real assets. Another 19% invest between 5% and 10%, while 19% allocate between 10% and 15%. Just 9% put more than 15% toward these investments. Real estate appears to be the more familiar choice, but other real assets — including infrastructure, natural resources, and commodities — remain less represented in advisor portfolios than in institutional portfolios. See More: 3 Real Asset ETFs to Know as Demand for Infrastructure GrowsWhat Happens When You Add Real Assets to a Traditional Portfolio?During the webcast, experts compared three portfolio strategies with the traditional 60/40 mix of stocks and bonds. Each strategy approached real assets differently, from balancing investment risk and returns to providing greater protection against inflation. The findings suggest that adding a 10–20% allocation to real assets could help investors generate more income, improve returns relative to the risks taken, and reduce reliance on highly valued investments. In other words, real assets may offer a way to strengthen a traditional portfolio without relying so heavily on stocks and bonds alone.Implementing Real Asset Exposure With Targeted ETFsAdvisors looking to diversify beyond traditional stocks and bonds can use targeted ETFs to access real estate, natural resources, and energy infrastructure. The ALPS ETF lineup offers several options across these categories: Real Estate & Resources: The ALPS Active REIT ETF (REIT A-), ALPS REIT Dividend Dogs ETF (RDOG B-), and ALPS | CoreCommodity Natural Resources ETF (CCNR ) target real estate and natural resource equity upside. Energy & Infrastructure Themes: The ALPS Electrification Infrastructure ETF (ELFY ), ALPS Nautilus SMR, Nuclear & Technology ETF (SMRF), and ALPS Clean Energy ETF (ACES B) provide exposure to secular energy transitions. In addition to individual ETFs, SS&C ALPS offers model portfolios, custom real asset allocations, and OCIO support through its multi-asset research team. For more news, information, and analysis, visit the ETF Building Blocks Content Hub.

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