Michael Batnick and Ben Carlson interview David Shassler, head of multi-asset solutions at VanEck, who manages the VanEck Real Assets ETF (ticker: RAAX). The conversation explores why real assets have surged after years of being overlooked, with the ETF's assets under management going vertical starting in mid-2023.

The discussion centers on a structural regime change favoring real assets driven by AI infrastructure buildout, government spending, and global de-dollarization. Shassler presents an optimistic case for real assets based on productivity growth and innovation rather than the traditional doom-and-gloom narrative typically associated with gold and commodities.

Real Assets Definition and Portfolio Construction

RAAX divides real assets into three buckets: resource assets/commodities (18%), assets with embedded scarcity like gold (23%), and income-generating real assets including infrastructure (11%) and utilities

The ETF uses a three-step process: identify key segments, run optimization to maximize diversification by minimizing volatility, then apply momentum and mean reversion strategies

"We ride momentum. We let our winners get bigger. The positions that aren't performing as well get smaller" - David explains the quantitative approach to position sizing

The AI Infrastructure Bottleneck Thesis

AI development follows three phases: build, adopt, automate, with current buildout phase creating massive demand for infrastructure, energy, and critical minerals

"If you're bullish on AI and you believe that's going to happen, well, then you're bullish on infrastructure. You're bullish on infrastructure development and you're bullish on energy" - David on the connection

AI productivity gains will increase living standards globally, with "rich people consume more energy than poor people," creating sustained energy demand beyond just data centers

The spending cycle extends beyond 18-24 months due to slow U.S. construction timelines and inevitable cost overruns on major infrastructure projects

Gold Bull Market Dynamics and Central Bank Demand

Current gold bull market started in 2022 with 200% gains, compared to 500% in 1970s and 600% in 2000s cycles, suggesting significant room for growth

"Gold follows silver, not vice versa" - David explains precious metals relationship, with silver benefiting from both scarcity and industrial electrification demand

Dollar weaponization against Russia triggered global de-dollarization as countries seek "neutral reserve asset" protection from U.S. policy volatility

Gold market size relative to expanded financial markets means "this gold bull market will probably be more intense than the ones of the previous times, more volatile"

Regime Change and Government Spending Drivers

Post-COVID regime change began with 42% money supply increase overnight, kicking off persistent inflation cycle that favors real assets over financial assets

U.S. faces "global arms race" with China on AI development where "losing can't happen," requiring massive infrastructure investment despite debt levels

"The big, beautiful bill was an appetizer for the spending bills that will come up in the future to keep us competitive in this global AI arms race" - David on future spending

Reshoring manufacturing means "we're going to build now, we're going to build in the future what already exists now for more expensive," driving commodity demand

Historical Anomaly: Stocks and Gold Both Rising

2020s marks first decade where stocks and gold both perform well simultaneously, breaking historical pattern of inverse correlation across decades

Previous cycles showed clear alternation: 1970s good for gold/bad for stocks, 1980s-90s great for stocks/poor for gold, 2000s good for gold/bad for stocks

David frames this as positive story driven by productivity and growth rather than traditional gold narrative of economic collapse or currency debasement