HOW TO PLAY IT-Canada money managers eye real assets for diversity
* Real estate, precious metals, energy offer portfolio diversity
* Real assets used to be inaccessible to all but wealthy
* Assets need long-term view hand
By Andrea Hopkins
TORONTO, Oct 10 (Reuters) - When Canada's big pension funds started to diversify out of stocks and bonds, they turned to real assets in a bid for better returns. But buying real estate, infrastructure and commodities isn't just for big players anymore, and Canadian asset managers are offering them to ordinary clients.
After years of putting inflation worries on the back burner because global growth is subdued and interest rates are at historic lows, money managers are rolling out more products aimed at protecting against inflation and spreading risk.
"I really believe everybody should have some access to real assets. It primarily goes back to preservation of wealth and the possibility to create wealth as well. It's got the inflation protection that other types of assets may not give you," said Steve Yuzpe, chief financial officer at private equity firm Sprott Resource Corp.
Canadian pension funds now typically hold 17 percent to 25 percent of real assets buying pipelines, farmland, energy and gold getting a return on investment that has long attracted anyone wealthy enough to be able to afford such things.
When he managed the money of wealthy families, Som Seif saw how real assets played a role in their portfolios. Now, the Canadian exchange-traded-fund (ETF) pioneer and founder of Purpose Investments wants to provide the same access to all Canadians, but at a lower cost. Continued...