Facebook Twitter Instagram
    • About
    • Subscribe
    • Contact
    • Report Library
    • Manager Login
    Facebook Twitter LinkedIn RSS
    HedgeNordic
    • Home
    • Allocator Angle
    • Report Library
    • Nordic Hedge Award
      • Nominations 2021 Nordic Hedge Award
      • Rookie of the Year
      • Jury Board
      • Historic Winners
      • Statistics
    • Nordic Hedge Index
    • Webinars & Podcasts
    HedgeNordic

    All Aboard the Bubble!

    Eugeniu GuzunBy Eugeniu Guzun24/11/2017No Comments
    Facebook Twitter LinkedIn Email

    Stockholm (HedgeNordic) – One distinguishable trend in the institutional investor universe has been the gradual but clear shift toward increased exposure to real assets such as real estate and infrastructure. Real estate experts state that this reallocation of assets represents a significant tendency among many pension funds, sovereign wealth funds, endowments and foundations.

    Some even claim that the rediscovery of the potential of real assets represents one of the most noticeable themes of this decade within the institutional investment community. The growing appeal of real estate and infrastructure has been challenging the traditional mix of equities and bonds within pension fund and private investor portfolios. Fixed-income investments offer insufficient yields, while the upside potential of equities remains subdued in many markets due to modest economic growth and fully-priced stock market valuations. As a result, institutional investors are constantly searching for sources of long-term income, simultaneously seeking protection from future increases in market volatility and impending inflation instigated by global quantitative easing programs.

    A series of studies conclude that increased exposure to real assets can have a beneficial effect on a traditional portfolio by reducing volatility and increasing returns. For instance, real estate specialist CenterSquare Investment Management studied the effects of a 20%-allocation to real assets on a tradition 60/40 portfolio (with 60% equity and 40% bond allocation) over the period of 1995 to 2015, with their study showing that a portfolio with 10% of investable assets in private real estate, 5% in listed real estate and 5% in listed infrastructure exhibited both an annual return and a volatility of 7%. This compares to the return of less than 6% and volatility of over 9% for the traditional 60/40 portfolio. Given the local nature of real assets, different real asset categories normally exhibit low correlations both with public financial markets and with one another. In addition, the long-term nature of real estate investing matches up well with the long-term liabilities of many institutional portfolios.

    This article is part of our special report on real estate and infrastructure. Read the rest of the article and more about the industry here.

    Share. Facebook Twitter LinkedIn Email
    Previous ArticleKTH opens Brummer & Partners MathDataLab
    Next Article Five Awards for Three Nordic Performers
    Eugeniu Guzun

    Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018.

    Related Posts

    Día de Muertos

    The Goal of Sustainable Finance

    Special: ESG in Alternative Investments

    Add A Comment

    Leave A Reply Cancel Reply

    Time limit is exhausted. Please reload CAPTCHA.

    Most read today:
    • Mortgage Funds – Alternative Fixed Income, or Just the New T...
    • Lower no Longer: Cash & Carry in the Emissions Markets
    • Adding Leverage to a Fund Does Not Always Increase Risk
    • Tidan is Different
    • ESG Implementation in Mandatum’s Private Debt Program
    • A Light-Footed Shipping-Only Strategy
    • In-Depth: Inflation Protection

    Ukraine, Supply-Chain Shortages and Soaring Prices – Accelerators of Sustainable Development

    18/05/2022

    New Theme: Real Income Destruction

    17/05/2022

    Blockification

    16/05/2022

    The Inflation Puzzle

    12/05/2022
    Promotion:
    Video: Manager Interviews
    https://www.youtube.com/watch?v=tni7dQvQrmo

    Subscribe to our newsletter

    HedgeNordic: Your Single Access Point to the Nordic Hedge Fund Industry!

    Check your inbox now to confirm your subscription.

    Most read articles this week:
    • Real Assets: AP4’s True “Alternative”
    • Special Report: Private Markets
    • European Real Estate in the New Economic Climate
    • PFA Hires PM from Hedge Fund Space
    • ESG Implementation in Mandatum’s Private Debt Program
    • Month in Review – May 2022
    • Recent
    • NHX
    • In Depth

    Procrastinated Risk is Knocking on the Door

    23/06/2022

    PFA Hires PM from Hedge Fund Space

    22/06/2022

    Month in Review – May 2022

    22/06/2022

    Real Assets: AP4’s True “Alternative”

    20/06/2022

    Month in Review – May 2022

    22/06/2022

    Month in Review – April 2022

    12/05/2022

    Follow Your Favourite Hedge Fund

    11/05/2022

    Month in Review – March 2022

    13/04/2022

    Ukraine, Supply-Chain Shortages and Soaring Prices – Accelerators of Sustainable Development

    18/05/2022

    New Theme: Real Income Destruction

    17/05/2022

    Blockification

    16/05/2022

    The Inflation Puzzle

    12/05/2022
    Newsletter Subscription:
    Most Recent Posts:

    Procrastinated Risk is Knocking on the Door

    23/06/2022

    PFA Hires PM from Hedge Fund Space

    22/06/2022

    Month in Review – May 2022

    22/06/2022

    Real Assets: AP4’s True “Alternative”

    20/06/2022

    European Real Estate in the New Economic Climate

    20/06/2022
    Publisher

    Nordic Business Media AB
    Corporate No.: 556838-6170
    BOX 7285
    SE-103 89 Stockholm, Sweden

    VAT No.: SE-556838617001
    Tel.:+46 (0) 8 5333 8688
    Mob.: +46 (0) 7 06566688
    Email: info@hedgenordic.com

    STAY INFORMED

    HedgeNordic: Your Single Access Point to the Nordic Hedge Fund Industry!

    Subscribe to our newsletter:

    Check your inbox now to confirm your subscription.

    RSS Hedge Fund Job Digest
    • Fund Quant Developer 24/06/2022
    • Corporate Accountant 24/06/2022
    • Institutional Sales – Assistant Vice President 24/06/2022
    • Quality Controls Analyst 24/06/2022
    • Counterparty Credit Risk VP 24/06/2022
    • Assistant Trust Officer 24/06/2022
    • Assistant Vice President – Residential Mortgage Analytics 24/06/2022
    • Senior Lead Analyst 24/06/2022

    Copyright © 2022 Nordic Business Media AB

    © 2022 Nordic Business Media AB
    • About
    • Cookie Policy
    • Privacy Policy

    Type above and press Enter to search. Press Esc to cancel.

    We are using cookies to give you the best experience on our website.

    HedgeNordic
    Powered by  GDPR Cookie Compliance
    Privacy Overview

    This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

    Strictly Necessary Cookies

    Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

    If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.