“Difference between property types matter – apartments and offices are very different investments,” according to a Vident note.
“Our largest allocations are to core property types such as residential, office, industrial, retail and diversified due to their strong track record of delivering the stabel income, inflation protection, and growth investors seek in real estate,” Vident added.
Leverage and governance factors are further included to reduce exposure to higher risk companies. The responsible use of leverage can potentially enhance returns, but taking on too much debt is risky, so the portfolio includes companies with prudent leverage. Additionally, firms with significant governance risks like external management are excluded from the portfolio to diminish further unknowns.
Financial advisors who are interested in learning more about the real estate sector can register for the Thursday, May 31 webcast here.