Durable cash flows and resilient returns in real assets

Investors concerned about the stability of forward-earnings and uncertain about the multiple they are paying for today’s equities should seek shelter in real assets. Real assets – infrastructure and real estate – perform essential functions such as housing, power, transport, and communications. They often exhibit contracted or regulated cash flows. These cash flows provide a bedrock of stability during economic stress, while capturing upside during cyclical growth periods.

During economic dislocations, real asset cash flows have proven durable while outperforming over the long-term. Real asset investment performance has followed: Over the past year, as an example, we have witnessed a period of immense macro stress and real assets have outperformed global equities and bonds. Over the past 20 years, through multiple cycles, listed real assets have also outperformed global equities and bonds.