Cohen & Steers Diversified Real Assets

Cohen & Steers Diversified Real Assets fund combines the wide arrange of expertise at Cohen & Steers in a portfolio that can offer attractive returns with solid inflation protection. The investment process will take into account a large number of factors that can affect markets and create a portfolio of real assets such as real estate, natural resources and infrastructure.

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Our Opinion
Fund Manager
Key Facts
Fund Performance
Risk
Company Description
Investment process
ESG

Our Opinion

While this fund is a relative newcomer to the UK market, it has the backing of Cohen & Steers’ depth and breadth of expertise. It offers investors a single destination for a range of inflation protecting assets, built with an eye on diversification, as well as returns. It should also offer investors a return profile very different to other funds out there. We believe this makes it a compelling choice, especially in tough inflationary environments.

Fund Manager

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Fund Manager

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Vince Childers, Lead Manager Vince Childers, CFA, is Senior Vice President and Head of Real Assets Multi-Strategy at Cohen & Steers, where he manages the real assets strategy. He joined the firm in 2013 after co-managing real asset strategies at AllianceBernstein, overseeing $2.3 billion in assets. Vince began his career in financial advisory services at Houlihan Lokey. He holds an MBA from Carnegie Mellon University and a BS from Vanderbilt University, and he is based in New York.

Vince Childers, Lead Manager Vince Childers, CFA, is Senior Vice President and Head of Real Assets Multi-Strategy at Cohen & Steers, where he manages the real assets strategy. He joined the firm in 2013 after co-managing real asset strategies at AllianceBernstein, overseeing $2.3 billion in assets. Vince began his career in financial advisory services at Houlihan Lokey. He holds an MBA from Carnegie Mellon University and a BS from Vanderbilt University, and he is based in New York.

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Key Facts

Asset type Alternatives

Annual Income (Historic) -

Sector Specialist

Gearing-

Fund Size-

Fund Manager Start Date 31 May 2018

Ongoing Charges Figure (OCF) -

Annual Management Charge (AMC) -

Fund Performance

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Risk

Whilst the majority of the process focuses on asset allocation, performance is designed to come from individual stock selection. The fund will be invested in real assets which should aid performance in inflationary times. However, the low beta nature of the asset class will likely mean the fund will lag during times when equity markets are performing strongly.

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Risk: 45

Company Description

Cohen & Steers was founded in 1986 as specialists in Real Estate and was the first dedicated manager in the sector. It is now a publicly listed industry leader, with over 350 staff across five cities in three continents. The firm has $80bn of assets under management, predominantly in the listed real assets space, as well as some assets in alternative income and multi-strategy. Almost all are in asset-backed securities. The firm’s specialism and experience has given it enormous scale and a huge depth to its research team.

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Fund Performance

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Risk

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Whilst the majority of the process focuses on asset allocation, performance is designed to come from individual stock selection. The fund will be invested in real assets which should aid performance in inflationary times. However, the low beta nature of the asset class will likely mean the fund will lag during times when equity markets are performing strongly.

Company Description

Close

Cohen & Steers was founded in 1986 as specialists in Real Estate and was the first dedicated manager in the sector. It is now a publicly listed industry leader, with over 350 staff across five cities in three continents. The firm has $80bn of assets under management, predominantly in the listed real assets space, as well as some assets in alternative income and multi-strategy. Almost all are in asset-backed securities. The firm’s specialism and experience has given it enormous scale and a huge depth to its research team.

Investment process

The fund invests in four key areas. These are typically tangible assets that feature early in the supply chain, which are either the structures or materials that can facilitate economic growth. These are global real estate, commodities, natural resources and listed infrastructure. These are combined to offer a range of drivers at different points in the economic cycle, as well as a strong level of inflation protection.

Each of these assets offers different risk and return profiles. The team will first look at the macroeconomic backdrop to determine the allocations between each, before filling up those allocations with individual securities. As the portfolio is a combination of all the different asset classes, each team at Cohen & Steers has an input into this fund. Vince then considers everyone’s ideas before using the best to create the portfolio.

The process itself starts with an allocation model which helps determine where to be under/overweight asset classes, with a six to 12-month investment horizon. The model takes in multiple different inputs including inflation and interest rates, equity risk premiums, as well as factors such as the strength of the dollar and the oil price. Each asset will have different sensitivities to these factors, and these are balanced against prevailing market conditions. Vince uses the diversification benefits of different asset classes and their sub classes to manage the overall risk of the portfolio.

From this framework, the asset allocation strategy group will assess where the current portfolio is positioned, how it is performing and what risks it is taking, and how this fits with the allocation model. This helps to determine within each asset class where to allocate. For example, within commodities, the team will choose how to split the portfolio between energy, agricultural products, precious metals and industrial materials. With the inputs from this phase, Vince will set the allocations.

The dedicated team in each asset class will analyse individual securities and pick their best ideas. These teams are responsible for mandates elsewhere in the business and use their expertise and ideas to fill this portfolio according to the guidelines set. In order to get exposure to these assets, the fund will either buy the same holdings as the dedicated teams, or in the case of commodities will use derivatives for better efficiency. The fund can also allocate up to 10% in fixed income which is used as a strategic allocation and tactical risk management tool.

After filling the portfolio allocations, the individual managers will also provide feedback from what they are seeing ‘on the ground’ to Vince. This is fed back into the allocation model at the beginning of the process to help determine the allocations going forward. This leads to a highly iterative process which takes input from all stakeholders and their expertise at the firm.

Risk

Whilst the majority of the process focuses on asset allocation, performance is designed to come from individual stock selection. The fund will be invested in real assets which should aid performance in inflationary times. However, the low beta nature of the asset class will likely mean the fund will lag during times when equity markets are performing strongly.

ESG

ESG - Integrated
Cohen & Steers views ESG as critical to unlocking value and mitigating risk. There is a four-stage process. First, ESG factors are identified by analysts using MSCI as a guide. Second, they score each E, S and G factor for a stock starting with third-party data and enhancing this with their own proprietary assessments. Thirdly, they will integrate this into the investment assumptions made in valuing a stock. They will make adjustments to cash flow growth, or valuation adjustments in the dividend discount model to make a quantitative impact to a stock. Finally, they will look to encourage better behaviour. Cohen & Steers will look to engage with a company and push it to be better, which will help with company performance on behalf of shareholders.

Related Insights

The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.