In an investment environment laden with challenges from rising interest rates to a possible global slowdown, listed real estate comes with advantageous features such as inflation-resilient cash flows and better liquidity than bricks and mortar. As such, listed real estate is a portfolio diversifier offering investors attractive risk-adjusted returns over the long haul.
Listen to this Talking heads podcast with portfolio managers Claire Mehu and Anne Froideval as they discuss the merits of this asset class with chief market strategist Daniel Morris. Listed real estate has a relatively low correlation with broad market equities over the longer term. Other important attributes are the prospect of limited supply in an already tight market and the value-enhancing effects of regulations targeting the sustainability of buildings.
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Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience.
Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice.
The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.
Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.