May 9, 2019
The wide selection of listed real assets available, and their accompanying inflation-protection characteristics, raise a number of portfolio-construction considerations for most institutions. The paper below discusses the case for global listed real assets, the inflation characteristics of varying asset types, and asset allocation issues. In the accompaying interview, Stefan Löwenthal discusses Macquarie’s approach to global listed real assets, and ways institutions may approach the asset class.
Read the paper
Read the interview
IMPORTANT RISK CONSIDERATIONS
Investing involves risk, including the possible loss of principal.
The views expressed represent the Investment Team’s assessment of the market environment as of May 2019, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice and may not reflect the Manager's views.
Past performance does not guarantee future results.
Diversification may not protect against market risk.
International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise.
They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt. Fixed income securities may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
Currency risk is the risk that fluctuations in exchange rates between the US dollar and foreign currencies and between various foreign currencies may cause the value of investments to decline.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.
Investment strategies that hold securities issued by companies principally engaged in the infrastructure industry have greater exposure to the potential adverse economic, regulatory, political, and other changes affecting such entities.
A sector is a segment of the economy that includes companies providing the same types of products or services. Although companies within a sector tend to be reasonably consistent in their fundamentals, these fundamentals may differ substantially from one sector to another. For example, some sectors are cyclical, rising and falling with changes in the economy while others are defensive, maintaining their strength despite economic ups and downs.