Why Private Real Estate

A strategic addition to a traditional portfolio of stocks and bonds

Relative to a traditional portfolio composed of 60% large-cap stocks and 40% bonds, a portfolio which includes some allocation to private real estate has historically shown the ability to drive higher returns, with generally more annual income and lower volatility over the past 20 years.1 Learn how allocating 20-30% to private real estate could impact your portfolio.

Traditional portfolio vs Portfolio with private real estateTraditional portfolio vs Portfolio with private real estate

See Definitions at the bottom of this page for definitions. You cannot invest in an index. Index data does not reflect the deduction of fees and other expenses which would reduce returns. Past performance is not a guarantee of future returns.

The benefits of investing in real estate

Income

Year after year, real estate has proven its ability to deliver superior income streams to investors.

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Stability

While other types of investments zig and zag, real estate has a reputation for staying steady.

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Risk-adjusted return

Managing your portfolio’s risk doesn’t need to mean sacrificing return potential.

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Income

Consistent historical income generation

Real estate has a well-earned reputation for being a reliable source of passive income. In fact, the income component of the NPI (the index that tracks private real estate performance), has averaged a higher rate than the yields of these other major asset classes:

how we differ from publicly traded REITs

STABILITY

Resilience during past economic crises

Private real estate has historically demonstrated low correlation with both publicly traded stocks and REITs. When public sectors of the market have exhibited greater degrees of volatility and vulnerability to investor sentiment, real estate has been steady in comparison — especially during the past three major economic crises.

RISK-ADJUSTED Return

A balance of security with return potential

Of the four major asset types now readily available to online investors, private real estate generally mitigates risk while still prioritizing attractive returns, as shown here.

Time period (years)

How private real estate could impact your portfolio

Move the sliders below to create a portfolio with private real estate. Then click calculate to see how your custom portfolio would hypothetically perform against a traditional portfolio of 70% stocks and 30% bonds over the last 20 years

Stocks 60%
Bonds 20%
Private real estate 20%
Recalculate to see results for your changes

Avg. annual return

Risk (volatility)

Standard deviation of annual total returns in the indicated simulation

13.20%

Traditional portfolio

8.10%

Your portfolio

We ran 1,000 scenarios and the total return of your custom portfolio outperformed in 98.8% of scenarios.


Definitions

Bonds: Represented by the Bloomberg Barclays U.S. Aggregate Bond Index, a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency).

Public REITs: Represented by the National Associate of Real Estate Investment Trusts (NAREIT) All REITs index, a market capitalization-weighted index that and includes all tax-qualified real estate investment trusts (REITs) that are listed on the New York Stock Exchange, the American Stock Exchange or the NASDAQ National Market List.

Private real estate: Represented by the National Council of Real Estate Investment Fiduciaries (NCREIF) National Property Index (NPI). This index goes back to 1978 and includes over 8,300 properties comprising over $658 billion in market value. Its objective is to provide a historical measurement of property-level returns to increase the understanding of, and lend credibility to, real estate as an institutional investment asset class.

Stocks: Represented by the S&P 500, an index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe (Investopedia).