Core of the matter: How investors can achieve consistent core-like returns in today’s market and through cycles
Core assets’ ability to generate reliable income has made them a staple of institutional portfolios, especially in the current low-growth environment. Globally, fierce competition for core assets has increased as more international investors enter the arena, and investors now frequently face sky-high prices in prime gateway markets.
But last year, overall returns from core funds dropped significantly, and return expectations are lower than they have been the past several years. Given this, what role should core play for institutional investors today? How can investors achieve consistent, core-like returns and reduce volatility in their portfolios?
The term “core” can certainly mean different things to different investors, and one person’s core could be another person’s core-plus. But most managers and investors probably can agree with Tim Wang, director and head of investment research for Clarion Partners in New York City, that a core real estate investment s