Real Assets Multi-Strategy
The strategy seeks to achieve attractive long-term total returns and maximize real returns during inflationary environments, through a diversified portfolio of real assets.
WHY COHEN & STEERS
Unrivalled experience in liquid real assets from a team that is time-tested over multiple market cycles
Proprietary investment process that includes extensive research leveraging a team of over 55 investment professionals that covers real estate, infrastructure, commodities and natural resource equities
Experienced analysts and traders in the key markets, including New York, London and Hong Kong, offer local knowledge and real-time decision-making
WHY REAL ASSETS
Outperformance during inflationary periods
Positive inflation sensitivity may protect against the potentially damaging effects of accelerating inflation on a portfolio concentrated in stocks and bonds
Distinct performance drivers generally result in differentiated behaviors from equities and fixed income
Historically strong returns with less volatility
Real assets may improve risk-adjusted portfolio returns without sacrificing the potential for equity-like returns over a full market cycle
The Cohen & Steers Real Assets Multi-Strategy seeks to achieve attractive long-term total returns and maximize real returns during inflationary environments. The strategy invests in a diversified portfolio of real assets, defined as investments in real estate companies, commodity futures, natural resource companies, global infrastructure companies, instruments linked to gold and other precious metals, and other permitted investments.
The strategy seeks to generate alpha from both top-down tactical asset allocation and bottom-up sector and security selection. We expect the top-down tactical allocation to contribute 20-25% to the excess returns over a full market cycle, with the remaining 75-80% coming from bottom-up active management at the individual sleeve level.
Allocating to listed real assets may help investors better manage inflation risks—while also enhancing diversification potential and risk-adjusted returns.
January 2022 | 1 min
WHY INVEST WITH US
Delivering value to our clients
Cohen & Steers has been at the forefront of real assets investing for more than 35 years. Our dedication, combined with our drive for excellence, has led us to build a foundation that is designed to provide consistent outperformance relative to our peers.
An experienced team
+1 managing analyst and the dedicated investment teams of the underlying components
Investments in real assets have the potential to diversify many of the long-term risks associated with a traditional stock and bond allocation. Real assets offer an exceptionally large investment universe made up of diverse subsectors across many different industry groups. However, this complexity calls for a framework that approaches the various categories of real assets as a unique, but coherent, asset class.
Our research-based framework emphasizes three key criteria that should be met to build a long-term, strategic allocation to real assets:
Potential for meaningful diversification benefits, helping to reduce portfolio volatility and improve risk-adjusted return potential
Historical ability to deliver attractive full-cycle returns that can potentially improve risk-adjusted portfolio returns without sacrificing growth potential
High positive inflation sensitivity to help protect against potentially damaging effects of accelerating inflation on a stock/bond portfolio
We believe that a real assets multi-strategy approach should outperform broad equities and bonds over inflationary periods. We also believe that active management is essential and that both top-down tactical allocation and bottom-up sector and security selection can play powerful roles in a real assets portfolio. However, we believe that implementation must be as part of a disciplined risk-management process. Properly managed, we believe real assets can serve as an ideal complement to a portfolio of stocks and bonds.
Our investment process
The strategy utilizes an integrated investment approach, combining top-down tactical asset allocation with bottom-up sector and security selection.
Our top-down capital allocation process utilizes a proprietary quantitative model designed to uncover opportunities in the core asset classes and provide recommendations for optimal asset allocation.
The strategy utilizes Cohen & Steers' Asset Allocation Strategy Group (ASG) to help determine the optimal mix of assets and conduct optimization analysis to determine asset allocation ranges and targets.
Debate and discussion among ASG members, along with input from the individual portfolio management teams, provide critical inputs that allow for model adjustments to incorporate house views.
The largest component of the strategy’s risk/return budget is bottom-up security selection. This step is done at the individual asset class level and is managed by the portfolio management teams for each of the four core underlying sleeve strategies.
Closed-end funds finished the quarter down following persistent inflation and continued talk of monetary policy tightening.
Head of Private Real Estate James Corl spoke with Institutional Investor for a feature story on our recent whitepaper and why an optimized real estate portfolio may require access to both listed and private markets.
Need to contact us?
We’d be happy to answer questions about our investment solutions or any corporate-related inquiries.
We consider the information in this communication to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of suitability for investment. Investors should consult their own investment professional with respect to their individual circumstances.
Past performance does not predict future returns. Risks involved with investment, including potential loss of capital, are substantial and should be carefully considered. The views and opinions are as of the date of publication and are subject to change without notice. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that a market forecast made above will be realized. Active management is not guaranteed to outperform the broader market index.
Important Risk Considerations: Investing involves risk, including entire loss of capital invested. There can be no assurance that the investment strategy will meet its investment objectives. Diversification is not guaranteed to ensure a profit or protect against loss. A real assets strategy is subject to the risk that its asset allocations may not achieve the desired risk return characteristic, underperform other similar investment strategies or cause an investor to lose money. Risks of investing in REITs are similar to those associated with direct investments in real estate securities, including (i) property values may fall due to increasing vacancies, declining rents resulting from economic, legal, tax, political or technological developments, lack of liquidity, limited diversification and sensitivity to certain economic factors such as interest rate changes and market recessions. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities, including market risk, credit risk, counterparty risk, leverage risk and liquidity risk and can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. Securities of natural resource companies may be affected by events occurring in nature, inflationary pressures and international politics. Global infrastructure securities may be subject to regulation by various governmental authorities, such as rates charged to customers, operational or other mishaps, tariffs and changes in tax laws, regulatory policies and accounting standards. Foreign securities involve special risks, including currency fluctuation and lower liquidity.
Futures Trading Is Volatile, Highly Leveraged and May Be Illiquid. Investments in commodity futures contracts and options on commodity futures contracts have a high degree of price variability and are subject to rapid and substantial price changes. Such investments could incur significant losses. The use of options on commodity futures contracts is to enhance risk-adjusted total returns. The use of options, however, may not provide any, or only partial, protection for market declines. The return performance of the commodity futures contracts may not parallel the performance of the commodities or indexes that serve as the basis for the options it buys or sells; this basis risk may reduce overall returns.