Video Description:

Meet the Manager: Vince Childers.  This video features an interview with Vince Childers, Senior Vice-President and Lead Portfolio Manager for the Real Assets Multi-Strategy portfolio at Cohen & Steers. He delves into the company’s history, investment philosophy and investment process that makes them unique.

Professional, positive background music plays throughout the entire video.

Video Content:

Description: Red screen. White text appears: Meet the Manager: Vince Childers - Cohen & Steers

Vince:  Hi, I'm Vince Childers, head of Cohen & Steers real assets multi strategy team and lead portfolio manager for our diversified real assets strategy portfolios. Both are roles I've held since joining the firm in 2013.  Cohen & Steers has specialized in real assets investing since its founding in 1986. We started with US rates and have expanded over the years to become a truly specialist global real assets manager.

Description: Cut to a white screen. Red text appears: Can you define real assets? Cut back to Vince’s interview.

Vince: There are a wide range of assets, securities, industries and sectors that we think can fit the bill as real assets, but most of our universe can be grouped into what we refer to as the core four, namely global listed real estate, global listed infrastructure, natural resource equities, and commodity futures. This core four formed the heart of real assets which ultimately are assets tied to the tangible world and they provide exposure to the physical structures and raw materials that help generate economic growth. The most important commonality of these investments is their relative sensitivity to inflation and their tendency to perform well during periods of rising and unexpected inflation.  The reason here is that inflation often affects the prices and revenues of real assets. Whether it's through contractual linkages, something we see in parts of the real estate and infrastructure universes or through more fundamental economic drivers like we find in commodities and resource equities.

Description: Cut to a white screen. Red text appears: What investment philosophy does Cohen & Steers follow and why? Cut back to Vince’s interview. 

Vince:  Our real assets investment philosophy is a direct extension of our long term research that shows real assets have unique economic sensitivities that tend to differentiate them from traditional stocks and bonds. As we see it, a well managed diversified blend of real assets provides a streamlined solution that encourages sensible diversification across the real assets universe and also reduces a lot of the headaches that can come with having separate allocations to each core real assets category.

Description: Cut to a white screen. Red text appears: What advantages you’re your investment process offer that makes you unique? Cut back to Vince’s interview.

Vince:  Our process starts with me and our real assets, multi strategy team where we first build out the long term strategic design of the portfolio. And from there, we set target allocation ranges or bans for each major asset category and over time adjust our allocations to those core real asset sleeves of the portfolio based on our views around relative value, market outlook and our broader risk management objectives. Most of our active risk at the portfolio level though comes from the underlying strategies in the portfolio themselves. Our in house specialist teams manage those strategies and aimed at alpha primarily through bottom up security selection. What makes Cohen & Steers unique is the reach and depth of our focus, portfolio managers and analysts across the globe.  We rely on their extensive investment management and research capabilities and their experience that they have in each of their respective focus areas to deliver alpha across all of the core real assets.

Description: Cut to a white screen. Red text appears: How could real assets provide great diversification for investor portfolios? Cut back to Vince’s interview.

Vince:  Our case for a diversified allocation to real assets is an outgrowth of our long term strategic research that suggests that maintaining a permanent allocation to real assets has unique benefits. Namely real assets, give investors the potential to maintain expected returns over full cycle periods while reducing overall portfolio volatility. Thereby you get a pick up in risk adjusted returns or portfolio efficiency all while gaining exposure to assets with a tendency to help perform during bouts of unexpected inflation which often weigh on core stock and bond returns. We believe attempts to tactically time investments in real assets based on inflation forecasts is ultimately a fool's errand. Inflation shocks have historically taken the toll they have precisely because investors and markets have failed to anticipate them.

Description: Cut to a white screen. Red text appears: Why do real assets appear attractive now? Cut back to Vince’s interview.

Vince:  We believe real assets are attractive now because the market is heavily discounting inflation risks.  As a result, real assets appear attractively valued relative to stocks and remain near the bottom of their long term performance cycle. We think what's being priced is an overly rosy view, especially in light of labor market tightness, high wage growth and sticky core inflation.  Add to that shifts toward more deglobalization and friend shoring. And what we think is a large commodity under investment cycle among other supply side challenges. And we think there are real risks that we end up dealing with a kind of stagflationary regime in the years ahead.  If there's one thing, our research tells us it's that real assets have a demonstrated history of outperforming during stagflationary periods when negative supply side shocks unexpectedly reduce growth and push inflation higher at the same time. Now, only time will tell where we go from here. But we think prudent investors should seriously consider the obstacles that we may face on the road ahead.

Description: Cut to a white screen. Red text appears: What are you most excited about within the real asset investing space right now? Cut back to Vince’s interview.

Vince:  Areas of real assets we favor today include natural resource equities, which we believe are presenting a compelling deep value opportunity.  We also see value in global infrastructure against a still inflationary backdrop. With most infrastructure, businesses generally able to pass along rising costs to consumers.  More broadly speaking, we like the current value opportunity across most of the real assets universe, particularly compared to global equities.  Our view is that a diversified, actively managed blend of real assets can potentially dampen the volatility of an investor's overall real assets allocation. While at the same time, boosting inflation sensitivity, enhancing diversification and improving their risk adjusted return profile. I'd conclude by saying that while we do see opportunity now, we believe real assets should be a permanent part of an investor's strategic allocation.

Description:  Music fades out.  Cut to white screen. The Canada Life logo appears. Canada Life and design are trademarks of The Canada Life Assurance Company. canadalife.com 1-204-946-1190.