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      article by Nuveen

      Demystifying private markets: The markets have changed, so have perspectives on allocations

      Jun 08, 2023

      Preparing for the worst, hoping for the best Investors create financial plans to prepare for the risks of inflation, unforeseen expenses and whatever else might lie ahead. In particular, retirees may incur higher costs for health care, housing or family events. We believe private markets can improve investors’ financial security and make financial plans more resilient.

      portfolios with private assets ended 82% higher than the value of the traditional only portfolio
      Source: Nuveen Portfolio Strategy Group; Bloomberg. Bloomberg, L. P., 31 Dec 2022. Performance data shown represents past performance and does not predict or guarantee future results. Dollar values based on expected return of portfolios over 30 years assuming a 5% spending rate and 3% inflation rate. The portfolio components listed with/without private assets in each asset class: 24%/39.2% US Large Cap.: Russell 1000 Total Return Index, 5%/2.6% U.S. Small Cap.: Russell 2000 Index, 10%/5% Int’l. Developed Equities: MSCI World ex USA USD Index, 5%/4.6% Emerging Markets: MSCI Emerging Markets Index, 0%/3.6% Short Term Treasuries: Bloomberg U.S. 2 Yr. Treasury Index, 9%/25.1% Core Fixed Income: Bloomberg U.S. Aggregate Bond Index, 3%/0% High Yield Corporate Bonds: Bloomberg US Corporate High Yield Index, 9%/8.7% Intermediate-Term Tax-Exempt: Bloomberg Municipal Bond Index, 3%/0.4% REITs: FTSE NAREIT All Equity Index, 3%/5.6% Global Infrastructure: S&P Global Infrastructure Index, 3%/0.3% Preferred Stocks: S&P U.S. Preferred Stock Index, 3%/1.1% U.S. Leveraged Loans: Credit Suisse Leveraged Loan Index, 0%/0.2% Emerging Market Debt: Bloomberg EM USD Aggregate Index, 3%/3.5% Tax-Exempt High Yield: Bloomberg Municipal Bond High Yield Index, 5%/0% Core Real Estate: NCREIF Open End Diversified Core Fund Index, 8%/0% U.S. Private Credit: Cliffwater Direct Lending Index, and 7%/0% U.S. Private Equity: Cambridge Buyout PE Index.


      Scenario analysis: Alternatives have a big impact We calculated the ending dollar value of a $1 million portfolio over 30 years with and without private assets. In a scenario assuming a spending rate of 5% per year, and inflation of 3% per year, the portfolio with private assets outperformed.

      why it works

      Does your allocation measure up?
      Portfolio plans vary based on investor profiles and market conditions, but all plans begin with a strategic allocation. We believe portfolios benefit from allocating to a wide array of asset classes, including private market assets.

      .

       

      View Disclosure

      For more information, please visit nuveen.com. This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or an investment strategy, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her financial professionals. The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. Performance data shown represents past performance and does not predict or guarantee future results. Investing involves risk; principal loss is possible. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. For term definitions and index descriptions, please access the glossary on nuveen.com. Please note, it is not possible to invest directly in an index. Important information on risk Investors should be aware that alternative investments are speculative, subject to substantial risks including the risks associated with limited liquidity, the use of leverage, short sales and concentrated investments and may involve complex tax structures and investment strategies. Alternative investments may be illiquid, there may be no liquid secondary market or ready purchasers for such securities, they may not be required to provide periodic pricing or valuation information to investors, there may be delays in distributing tax information to investors, they are not subject to the same regulatory requirements as other types of pooled investment vehicles, and they may be subject to high fees and expenses, which will reduce profits. Alternative investments are not suitable for all investors and should not constitute an entire investment program. Investors may lose all or substantially all of the capital invested. Nuveen provides investment advisory solutions through its investment specialists. Does your allocation measure up? Portfolio plans vary based on investor profiles and market conditions, but all plans begin with a strategic allocation. We believe portfolios benefit from allocating to a wide array of asset classes, including private market assets. Equity Fixed income Private markets 50% 30% 20% Strategic portfolio allocation NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

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