Now is the time to add actively managed REIT exposure to your portfolio
Inflation has become a bigger threat to portfolios than it has been over the past decade, rising more than policymakers predicted, leaving investors searching for optimal ways to protect their returns and protect themselves. against inflation.
With stocks at all-time highs and bond yields rising from all-time lows, now is a great time to consider an allocation to global real estate. Global REIT performance has not rebounded like traditional stock markets, and like other asset classes, large declines have led to higher future return potential.
The Bureau of Labor Statistics consumer price index (CPI) rose 8.5% in March from a year earlier, marking the fastest annual jump since 1981, eclipsing the previous record high of 7 .9% over 40 years in February, the US Bureau of Labor Statistics released last week.
Real estate, in its various forms, has historically provided protection against inflation and rising interest rates. Since 1972, REITs have generated attractive returns in a wide range of inflationary environments, with the ability to offset rising costs by increasing rents as demand for space increases, according to Virtus.
In times of moderate inflation, dividends from REITs have historically more than offset higher returns from traditional stocks, while in times of high inflation, high income returns offset lower REIT prices, virtus wrote:.
Gain exposure to a wide range of global real estate markets through strategies such as Virtus Duff & Phelps Global Real Estate Securities Fund (VGISX) has provided lower correlations and lower beta to traditional stocks and, as part of a balanced portfolio, has historically lowered risk and enhanced returns, according to Virtus.
Focusing on rental property companies with contractual income, the VGISX management team has built up a compelling track record of risk-adjusted performance through actively managed stock selection.
Active managers have the ability to take advantage of market upheavals, which makes active management a key approach to gaining exposure to real estate.
VGISX is actively managed by Geoffrey Dybas and Frank Haggerty, who have been co-PMs since the fund’s inception in 2009. Dybas and Haggerty are backed by an experienced team with exceptional continuity, applying a disciplined investment process focused on listed property owners/operators High quality.
The average Morningstar Rating of the strategies currently managed by Dybas and Haggerty is 4.3 stars, demonstrating impressive risk-adjusted performance.
Dybas and Haggerty average 22 years of portfolio management experience and manage five investment vehicles together, with a Bronze asset-weighted average combined with Morningstar analyst and quantitative rating indicating potential. to generate positive alpha overall, according to Morningstar.
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