October 28, 2016
For years, U.S. Bank Wealth Management has viewed real estate as one of the four pillars of a well-diversified portfolio, along with equities, fixed income and commodities. On Sept. 1 of this year, the world’s major stock index curators validated this philosophy and established real estate as one of the core 11 sectors that comprise their indexes. Previously, real estate was included in an industry group within the financial sector.
“As one of the cornerstone asset classes, we believe that real estate can play a role in just about everyone’s portfolio, of course depending on their investment objectives, life needs and life goals,” says Eric Lee, Vice President of the Traditional Investments Group for U.S. Bank Wealth Management. “The decision to designate real estate as a sector is a recognition that these investments are unique and different from other financial service companies such as banks, insurers and brokerages."
Diversification by Design
Real Estate Investment Trusts (REITs) account for much of the new real estate sector, which also includes real estate development and management companies. Mortgage-related companies will remain in the financial sector.