Real Estate and Bonds: A Complementary Pairing

Many investors have pared back their real estate allocation and shifted toward bonds this year, motivated by rising interest rates and a desire to maximize current income. We believe that investors should not perceive real estate as an alternative to fixed income, but rather as an allocation that can offer numerous potential benefits as part of a well-diversified portfolio.

When added to a portfolio that includes bonds, real estate can potentially provide:
• strong diversification benefits
• effective protection against inflation
• potentially enhanced real returns via a combination of income and capital appreciation.