Navigating the Post-Pandemic Real Asset Re-Rating: A Deep Dive into Macquarie Global Listed Real Assets Fund's Strategy

In the shadow of a post-pandemic world, where central banks have flooded markets with liquidity and interest rates remain stubbornly low, investors are increasingly turning to real assets to hedge against inflation and capitalize on structural growth. The Macquarie Global Listed Real Assets Fund (MGLR) has emerged as a compelling vehicle for this transition, leveraging a dynamic multi-asset framework to navigate the re-rating of real assets in a low-yield environment.

The Case for Real Assets in a Low-Yield World

The global financial landscape has been reshaped by the pandemic. Central banks slashed rates to near-zero, and governments injected trillions into economies, creating a perfect storm for asset inflation. Traditional fixed-income investments now offer paltry returns, while equities face valuation pressures. Real assets—infrastructure, real estate, commodities, and inflation-linked bonds—have become a refuge for capital seeking both income and inflation protection.

MGLR's strategy is rooted in this reality. By allocating to sectors like data centers, regulated utilities, and renewable energy, the fund taps into structural tailwinds. For instance, the demand for data centers has surged due to AI, cloud computing, and quantum computing, creating a supply-demand imbalance that drives rental growth. Similarly, the energy transition is fueling demand for copper, aluminium, and nuclear energy, all of which are critical to electrification and decarbonization.

MGLR's Strategic Edge: Pairwise Analysis and Active Management

What sets MGLR apart is its use of pairwise analysis—a method that compares two assets to identify relative value opportunities. This approach reduces reliance on precise return forecasts and mitigates behavioral biases, allowing the fund to adapt swiftly to shifting macroeconomic conditions. For example, in a sticky inflation environment, MGLR might overweight commodities and infrastructure, which pass through cost increases efficiently. In a falling inflation scenario, it could tilt toward real estate, where valuations are rebounding after years of rate hikes.

The fund's active management is further bolstered by its leadership. Senior Portfolio Manager Aaron Young and global multi-asset strategist Stefan Löwenthal bring decades of experience in navigating complex markets. Their team's focus on ESG integration—via proprietary scoring and exclusion screens—adds a layer of risk management, aligning the fund with long-term sustainability trends.

Performance: Resilience Amid Volatility

MGLR's performance as of June 30, 2025, underscores its resilience. The fund delivered an 8.73% year-to-date return and a 9.63% annualized return over one year, outperforming benchmarks like the S&P Global Infrastructure Index (14.90% YTD). While its three-year return of 5.55% lags behind the index's 11.48%, its 10-year average of 6.39% and lifetime 8.10% return highlight its long-term value.

The fund's expense ratio of 0.91% (net of waivers) is competitive, especially given its active management. This cost efficiency, combined with its diversified portfolio—spanning 11.74% in top holdings like Equinix REIT and Enbridge—positions it to weather market volatility.

Strategic Sectors: Data Centers, Nuclear, and Metals

MGLR's 2025 focus is on sectors poised for structural growth:
1. Data Centers: With AI driving demand, the fund's exposure to REITs like Equinix REIT (1.67% of portfolio) benefits from rising occupancy and rental rates.
2. Nuclear Energy: As the U.S. Department of Energy projects a doubling of electricity demand by 2050, MGLR's tilt toward regulated utilities and nuclear operators addresses critical power needs.
3. Metals and Minerals: Copper and aluminium are essential for renewable energy systems. MGLR's natural resources holdings, including Shell PLC (1.47%), capitalize on supply constraints and pricing strength.

Risks and Considerations

While MGLR's strategy is compelling, investors must weigh risks. High upfront costs for nuclear projects and geopolitical tensions in resource-rich regions could disrupt returns. Additionally, the fund's 1.13% gross expense ratio, though reduced by waivers, may impact performance in a low-margin environment.

Investment Thesis: A Long-Term Play on Structural Trends

For investors seeking inflation protection and exposure to the energy transition, MGLR offers a balanced approach. Its dynamic allocation framework, ESG integration, and focus on high-growth sectors make it well-suited for a low-yield world. While short-term volatility is inevitable, the fund's 10-year track record and top-tier Lipper ranking (1st out of 52) suggest it can deliver consistent returns over full market cycles.

Final Take: In a world where traditional assets underperform, MGLR's real asset re-rating strategy is a masterclass in adapting to structural change. For those with a 5–10 year horizon, this fund is a compelling addition to a diversified portfolio—offering the dual benefits of capital appreciation and inflation hedging in an era of persistent uncertainty.