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Yields on public fixed income have been unattractive for some time, and with low rates and an uptick in inflation, we expect this trend to continue—and to potentially even produce negative real returns over the coming decade. Where can investors go for both real income and the diversification benefit that was once offered by bonds? For investors with the appropriate profile, real estate—particularly private opportunities—might offer a compelling alternative. Delegate Advisors CEO Andy Hart and Delegate Advisors Director of Portfolio Management Dunkin Allison explain why in our latest Delegate Discussion video.
Specifically, Hart and Allison discuss:
- Their high-conviction belief that public fixed income is an unattractive asset class for the coming decade
- The characteristics that make real estate an attractive alternative
- The key factors working in favor of real estate in the current market environment
- Delegate’s current portfolio positioning and strategy for tilting portfolios towards real estate
Throughout the discussion, Hart and Allison explain why Delegate expects to see relatively attractive real returns from real estate in the coming years, including fundamental factors, valuations, inflation, and tax characteristics. This high-conviction view is driving a strategy to tilt portfolios toward this asset class and away from public fixed income.
That said, Delegate takes a client-by-client approach to allocation decisions, and there are important factors to consider before incorporating real estate into your portfolio, particularly private opportunities. Some of these include investor qualification requirements, short-term liquidity needs, and the quality and track record of individual investment managers.
If you have any questions about real estate and whether or not it is the right type of investment for you, please do not hesitate to contact us.