Toronto-based Russell Investments Canada Ltd. has launched the Russell Global Infrastructure Pool and the Russell Global Real Estate Pool for Canadian investors seeking to diversify their portfolios beyond traditional stocks and bonds.
“Institutional investors have been looking to invest in global infrastructure and real estate opportunities for increased diversification, and we believe retail investors would benefit from this same access,” explains David Feather, president and CEO, Russell Canada.
“In this low return and volatile market environment, investors need access to additional sources of portfolio diversification in order to improve their risk/return outcomes.”
The new pools complement Russell’s existing suite of fixed-income and equity solutions by offering investors the opportunity to invest in asset classes that have low correlations with traditional stocks and bonds.
Global infrastructure has historically delivered lower volatility, while both it and real estate securities have historically offered higher yield than traditional equities.
“Global infrastructure and real estate are generally underrepresented in most multi-asset portfolios,” says Greg Nott, chief investment officer for Russell Canada. “Thoughtful implementation of actively managed real assets may provide the potential for growth and income opportunities, differentiated return drivers and the benefits of active management.”
Russell Global Infrastructure Pool will be sub-advised by two experienced global infrastructure managers, each bringing complementary investment strategies.
Melbourne-based Colonial First State Asset Management Australia (Ltd.) is a specialized infrastructure manager with a slightly growth at a reasonable price (GARP) approach. It focuses on analyzing company fundamentals, such as the balance sheet and management team.
Boston-based Nuveen Asset Management focuses on companies that either build or operate tangible assets that offer steady, predictable cash flows with limited ongoing capital expenditures.
Russell Global Real Estate Pool will be sub-advised by two experienced global real estate managers, each bringing complementary investment strategies.
Boston-based AEW Capital Management is a value-oriented investment manager that selects real estate investment trusts (REITs) it believes are mispriced relative to their peers. The firm seeks to generate excess return by combining a disciplined quantitative analysis with “street-level” real-estate insights and capital markets expertise.
Chicago-based RREEF America uses an investment approach that evaluates both external factors such as the business cycle and competitive environment as well as company-specific factors such as leverage, earnings growth and competitive position, while taking a disciplined approach to managing risk.
Investors can invest in either of the individual pools or access them through a Russell multi-asset solution. Russell Global Infrastructure Pool and Russell Real Estate Pool will be included in several Russell LifePoints portfolios for Canadian investors, including the Russell LifePoints Conservative Income Portfolio and the Russell LifePoints Balanced Income Portfolio, each with a 2% allocation; the Russell LifePoints Balanced Portfolio and the Russell LifePoints Balanced Growth Portfolio, each with a 3% allocation; the Russell LifePoints Long-term Growth Portfolio, each with a 4% allocation; and the Russell LifePoints All Equity Portfolio, each with a 5% allocation. They will be included in the Russell Income Essentials Portfolio, each with a 2% allocation, and to the Russell Diversified Monthly Income Portfolio, each with a 3% allocation.