Diversification: 3 Choices Now

Market Snapshot

Diversification: 3 Choices Now

The idiosyncrasies of niche markets can provide opportunities but require professional expertise.


Commercial Real Estate

Overall, U.S. commercial building costs have risen 30% over the past decade…The positive outcome for commercial real estate investors is that high costs are holding back new construction and limiting over-supply risk, which is driving appreciation and rent growth of existing assets.

-Tim Wang and Julia Laumont, Clarion Partners

 

 

Infrastructure Stocks

In this environment, we believe investing in global listed infrastructure allows investors to navigate market volatility while remaining in equities. This is because infrastructure companies, when selected appropriately, can provide excellent visibility over revenues and dividends driven by stable earnings of the underlying assets, regulation and long-term contracts.

-RARE Infrastructure

 

 

Emerging Markets Debt

Emerging markets growth is poised to accelerate to a three-year high of 4.6% in 2020, based on the latest IMF forecasts…Valuation wise, real yields in emerging markets remain compelling, currently averaging roughly 170 basis points above those in developed markets.

-Chia-Liang Lian and Steven T. Saruwatari, Western Asset

 


Investment in real estate entails significant risks and is suitable only for certain investors as part of an overall diversified investment strategy and only for investors able to withstand a total loss of investment.

Definitions:

A basis point is one one-hundredth (1/100, or 0.01) of one percentage point.

Developed markets (DM) refers to countries that have sound, well-established economies and are therefore thought to offer safer, more stable investment opportunities than developing markets.

Emerging markets (EM) are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries.

The International Monetary Fund (IMF) is an international organization of various member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements.

Real yields are calculated by adjusting stated yields to compensate for inflation expectations over the time period during which the yields are expected to be paid.

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Diversification does not guarantee a profit or protect against loss.

Forecasts are inherently limited and should not be relied upon as indicators of actual or future performance.

Companies in the infrastructure industry may be subject to a variety of factors that could adversely affect their business or operations, including high interest costs in connection with capital construction programs, high degrees of leverage, costs associated with governmental, environmental and other regulations, the effects of economic slowdowns, increased competition from other providers of services, uncertainties concerning costs, the level of government spending on infrastructure projects, and other factors.