Many investors are familiar with the appeal of holding real estate. With a generally low correlation to other asset classes1, real estate can serve as an instant diversifier in a mixed-asset portfolio.
Historically, real estate has delivered strong relative performance across multiple cycles compared to other asset classes. Its characteristic stable income, underpinned by long-term leases, makes real estate a compelling alternative.
At its core, real estate is a local asset class. Moving beyond one’s domestic market, however, can offer significant diversification benefits and produce a smoothing effect on returns.