Real Asset Debt

The Whole Picture: Building Better Portfolios With Public and Private Real Asset Debt

White Paper

Jan 08, 2024

Institutional investors’ fixed-income portfolios often include exposures to traditional, lower-yielding public products—such as government bonds and investment-grade bonds—for their stability and liquidity benefits. In addition, when seeking to improve fixed-income portfolio returns and diversification, institutional investors often turn to higher-yielding private direct lending funds.

However, we believe having an allocation to public high-yield debt—with a focus on real assets—is another potential solution to consider as institutions look to enhance their fixed-income portfolios. We believe an allocation to real asset high yield, coupled with private debt and lower-yielding public product allocations, can provide potential portfolio benefits, including better credit quality, lower overall default risk, less interest rate sensitivity, greater sector diversification, and improved returns across different points in the economic cycle.

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Disclosure Information

This material is not, and is not intended as investment advice, an indication of trading intent or holdings or the prediction of investment performance. All information is current as of the date of this material. Views and information expressed herein are subject to change at any time. Brookfield Public Securities Group LLC disclaims any responsibility to update such views and/or information. This information is deemed to be from reliable sources however, Brookfield Public Securities Group LLC does not warrant its completeness or accuracy. This presentation is not intended to, and does not constitute an offer or solicitation to sell or a solicitation of an offer to buy any security, product, investment advice or service (nor shall any security, product, investment advice or service be offered or sold) in any jurisdiction in which Brookfield Public Securities Group LLC is not licensed to conduct business, and/or an offer, solicitation, purchase or sale would be unavailable or unlawful. Indexes are unmanaged and are not available for direct investment.

Investing entails risks, including possible loss of principal. Past performance is no guarantee of future results. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments.