Why BlackRock’s Panama Deal Highlights the Value of Real Asset ETFs
BlackRock acquires CK Hutchison’s Panama Canal port assets in a $22.8B deal, highlighting real assets’ investment value.
The Panama Canal has become highly politicized, being among the popular talking points of President Trump. However, a business deal relating to the Panama Canal occurred recently, in which CK Hutchison, a Hong Kong-based conglomerate, sold port assets, including those at the Panama Canal, to a consortium led by U.S. investment firm BlackRock.
CK Hutchison will transfer to the consortium the 90% interest it holds in Panama Ports Company, along with its 80% effective and controlling interest in 43 ports comprising 199 berths across 23 countries worldwide. The aggregate value of the entire deal is $22.8 billion.
According to the Panama Canal Authority, the canal offers the fastest route for seaborne trade between the U.S. East Coast and Asia, with sailing times of around 26 days- compared with 43 days around Cape Horn in southern Chile and 37 days around the Cape of Good Hope in South Africa.
The Importance of Real Assets
A seminal takeaway from this transaction is the growing importance of real assets and the benefits they can provide. Real assets can encompass many asset types, but three broad categories are often utilized within the asset class: Real Estate, Infrastructure, and Natural Resources. In the case of the Panama Canal deal, the investment value derived from owning the ports utilized to facilitate global trade is poised to be significant.
More broadly, as an asset class, real assets can hedge against inflation, provide added diversification, and be a return enhancer within one’s portfolio. As noted in a recent CBRE Investment Management article, real asset allocations within public and private pension plans are material in nature, indicating their value in helping to fulfill longer-term investment goals. As observed from the following chart, Canada’s public pension plans have a high allocation to real assets relative to geographic regions.
Investing In Real Assets
For Canadian investors interested in adding real asset exposure to their portfolio, several ETFs provide exposure to the asset class, namely:
National Bank’s NBI Global Real Assets Income ETF (Ticker: NREA) is sub-advised by Nuveen Asset Management, LLC, and provides global exposure to real assets. The manager utilizes a bottom-up investment approach and ESG criteria to identify and invest in the equities of high-quality companies. The portfolio is constructed to balance high income and growth opportunities. As of January 2025, the fund has a predominant allocation toward the Utilities (38%), Industries Services (30%), and Energy (25%) sectors. Aena SME SA, Enbridge Inc., and Nextera Energy Inc. are among the top holdings within the fund.
Purpose Investment’s Purpose Diversified Real Asset Fund ETF (Ticker: PRA) is sub-advised by Neuberger Berman Canada and aims to provide investors with exposure to a diversified portfolio of asset classes that are directly or indirectly linked to physical assets. These assets may include precious metals and related equities; industrial, energy, and agricultural commodities and related equities; REITs, emerging market currencies; real return bonds and treasury inflation‑protected securities; and cash.
As of March 7th, 2025, Energy (23%), Agriculture (21%) and Precious Metals (17%) were among the fund’s largest exposures. Bhp Group Limited, American Tower Corp, and Exxon Mobil Corp are among the top holdings within the fund.
AGF’s AGF Global Real Estate Fund (Ticker: AGLR) aims to provide global diversification and long-term capital appreciation outside of traditional asset classes through investment in listed securities globally, encompassing energy, materials, infrastructure, real estate, and precious metals.
As of December 2024, the Materials (29%), Energy (28%), and Real Estate (22%) were the largest sector exposures. Linde PLC, Enbridge Inc., and Cheniere Energy Inc. are among the top holdings within the fund.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
