Source: OppenheimerFunds. As of December 16, 2014.
Acronym definitions: MLPs are Master Limited Partnerships; Global REITs are Global Real Estate Investment Trusts; TIPS are Treasury Inflation-Protected Securities.
Investors are looking for new ways to diversify their portfolio, control risk and manage it through time.
Many investors have concluded that the traditional approach to portfolio construction—creating portfolios by assembling funds diversified by geography, capitalization and investment style—is not as effective as it once was.
OppenheimerFunds’ Global Multi-Asset Group has developed a new way of thinking about multi-asset portfolios that’s centered on client needs and objectives.
We replace the confusing and ever-expanding array of asset classes with multi-asset portfolios built to address key investment objectives: income, growth, diversification and real return. Every client goal ultimately requires a different mix of these building blocks.
Fixed income investing entails credit and interest rate risks. Risks associated with rising interest rates are heightened given that rates in the U.S. are at or near historic lows. When interest rates rise, bond prices generally fall. Investments in securities of real estate companies may be especially volatile. Because they do not have an active trading market, shares of Real Estate Investment Trusts (REITs) may be illiquid. The lack of an active trading market may make it difficult to value or sell shares of REITs promptly at an acceptable price. Derivative instruments, whose values depend on the performance of an underlying security, asset, interest rate, index or currency, entail potentially higher volatility and risk of loss compared to traditional stock or bond investments. Investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. Energy infrastructure companies are subject to risks specific to the industry such as fluctuations in commodity prices, reduced volumes of natural gas or other energy commodities, environmental hazards, changes in the macroeconomic or the regulatory environment or extreme weather. MLPs may trade less frequently than larger companies due to their smaller capitalizations which may result in erratic price movement or difficulty in buying or selling.
Small and mid-sized company stock is typically more volatile than that of larger, more established businesses, as these stocks tend to be more sensitive to changes in earnings expectations. It may take a substantial period of time to realize a gain on an investment in a small or mid-sized company, if any gain is realized at all. Investments in securities of growth companies may be volatile. Diversification does not guarantee profit or protect against loss.
These views represent the opinions of OppenheimerFunds and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the date of this presentation and are subject to change based on subsequent developments.