Our current views amid the recent market volatility related to the Coronavirus (COVID-19)

Our current views amid the recent market volatility related to the Coronavirus (COVID-19)

While economic and corporate earnings growth are highly likely to suffer as a result of the virus, the magnitude and duration of its impact obviously remain unknown.

What we do know is that listed real assets proved to be relatively resilient since the drawdown in broader equities began. We believe this validates the case for listed real assets as a strategic allocation within a diversified portfolio.

Source: Bloomberg

• Corporate statements: We are closely monitoring what multinational corporations are communicating with regard to supply chain disruptions and the level of company closures in affected countries (most notably China).
• Near-term lending conditions: The degree to which credit markets are open for companies to maintain near-term funding needs is a vital signal as we gauge the near-term health of the economy. Not surprisingly, the uptick in volatility has resulted in tighter credit conditions and the possibility of a liquidity event cannot be discounted.
• Valuations: Given the negative sentiment we are seeing a number of opportunities where stock prices have significantly dislocated from companies’ intrinsic values.

• At a high level, the majority of our asset classes generated relative outperformance compared to broader equities during the week ended February 28, 2020. However, there was a significant amount of dispersion within some of our sectors, given varying degrees of cyclicality.
• As active managers this affords us the ability to identify near-term dislocations where we feel markets have overreacted, and where meaningful discounts to long-dated cash flows can generate outsized risk-adjusted returns for patient capital.

Source: Bloomberg; as measured by property type returns within the FTSE EPRA/Nareit North America Index

Global infrastructure sector returns, February 19, 2020 – February 28, 2020

Source: Bloomberg; as measured by sector returns within the Dow Jones Brookfield Global Infrastructure Index

As the situation evolves, we will continue to manage our portfolios in what we believe to be an optimally risk-adjusted manner to help our clients achieve their long-term objectives.

© Brookfield Public Securities Group LLC. Brookfield Public Securities Group LLC is an SEC-registered investment adviser and represents the Public Securities platform of Brookfield Asset Management Inc. (“BAM”), providing global listed real assets strategies including real estate equities, infrastructure equities, multi-strategy real asset solutions and real asset debt. Brookfield Public Securities Group LLC is a wholly owned subsidiary of BAM.

Dan C. Tutcher, is a Managing Director of Brookfield Public Securities Group LLC (“PSG”) on the Energy Infrastructure Securities team.  Mr. Tutcher also serves on the Board of Enbridge, Inc.  PSG has adopted policies and procedures reasonably designed to address potential conflicts of interest while allowing PSG to continue to invest in Enbridge Inc.  However, from time to time, PSG may restrict any fund or account managed by PSG from acquiring or disposing of securities of Enbridge Inc. at any time.

The information in this commentary is not and is not intended as investment advice or prediction of investment performance. This information is deemed to be from reliable sources; however, Brookfield does not warrant its completeness or accuracy. This commentary is not intended to and does not constitute an offer or solicitation to sell or a solicitation of an offer to buy any security, product or service (nor shall any security, product or service be offered or sold) in any jurisdiction in which Brookfield is not licensed to conduct business, and/or an offer, solicitation, purchase or sale would be unavailable or unlawful.

Performance shown in USD unless otherwise noted. Past performance is not indicative of future results. Opinions expressed herein are current opinions of Brookfield Public Securities Group LLC and are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. Any outlooks or forecasts presented herein are as of the date appearing on this material only and are also subject to change without notice.

Each fund, account and investment vehicle in this strategy is managed individually. No assurance that any specific fund, separate account or other investment vehicle managed by Brookfield Public Securities Group LLC has previously or currently holds the names referenced herein.

There is no guarantee that the specific securities discussed herein or held by any specific fund, account, or other investment vehicle managed by Brookfield Public Securities Group LLC were profitable or will be profitable.

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Definitions
The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.
The FTSE EPRA/Nareit Developed Index is a free-float adjusted, liquidity, size and revenue screened index designed to track the performance of listed real estate companies and REITs worldwide.
The FTSE EPRA/NAREIT North America Index is designed to track the performance of listed real estate companies and REITS in North American markets (US and Canada).
The Dow Jones Brookfield Global Infrastructure Index is calculated and maintained by S&P Dow Jones Indices and comprises infrastructure companies with at least 70% of their annual cash flows derived from the owning and operating infrastructure assets.
The Alerian Midstream Energy Index is a broad-based composite of North American energy infrastructure companies.
The S&P 500 Index is an equity index of 500 widely held, large-capitalization U.S. companies.
The ICE BofA Preferred Stock REITs 7% Constrained Index is a subset of the BofA Merrill Lynch Fixed-Rate Preferred Securities Index including all real estate investment trust-issued preferred securities. The BofA ML Fixed-Rate Preferred Securities Index tracks the performance of fixed-rate U.S. dollar-denominated preferred securities issued in the U.S. domestic market.