Alternatives: What is really going on with real assets

After embracing alternative investment strategies – and particularly real assets – over the better part of the past decade, the significant increase in interest rates over the last 18 months has called into question the role that these strategies play in a portfolio. While high quality fixed income yields are now comparable to what is available in real estate and infrastructure, this is an incomplete analysis of the situation. 

Importantly, real assets provide a hedge against inflation, diversification and potentially a more durable source of yield than what will be available in fixed income over the longer-term. Furthermore, some of the unloved areas of these asset classes may provide investors with an opportunity for growth, particularly as valuations continue to re-rate.

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