Conservative Portfolio
Capital Preservation Focus
80% Bonds
20% Stocks
0% No Private Real Estate
20 year risk
6.04%
20 year return
5.00%
For illustrative purposes only. Hypothetical portfolio results shown do not represent the performance of an actual investment. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Diversification does not assure a profit or protect against market loss. All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Stock, bonds and private real estate are respectively represented by the S&P 500 Index, Bloomberg U.S. Aggregate Bond Index and NFI-ODCE Index as of 4Q2025. "Risk" is represented by standard deviation.
Impact of Adding Private Real Estate
For conservative investors prioritizing capital preservation, private real estate has historically provided meaningful risk reduction with minimal return sacrifice. Even at modest allocations, volatility decreased substantially while maintaining income-generating potential.
76% Bonds
19% Stocks
5% Private Real Estate
Risk impact
5.70% ↓ 0.34pp
Return impact
5.05% ↑ 0.05pp
72% Bonds
18% Stocks
10% Private Real Estate
Risk impact
5.44% ↓ 0.60pp
Return impact
5.11% ↑ 0.11pp
68% Bonds
17% Stocks
15% Private Real Estate
Risk impact
5.28% ↓ 0.76pp
Return impact
5.16% ↑ 0.16pp
64% Bonds
16% Stocks
20% Private Real Estate
Risk impact
5.22% ↓ 0.82pp
Return impact
5.20% ↑ 0.20pp
Key takeaway
Conservative portfolios could have achieved up to 13.6% risk reduction at maximum allocation while increasing returns—demonstrating that stability-focused investors can potentially enhance risk-adjusted performance through private real estate diversification.
Moderately Conservative Portfolio
Balanced Income & Growth
60% Bonds
40% Stocks
0% No Private Real Estate
20 year risk
8.38%
20 year return
6.65%
For illustrative purposes only. Hypothetical portfolio results shown do not represent the performance of an actual investment. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Diversification does not assure a profit or protect against market loss. All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Stock, bonds and private real estate are respectively represented by the S&P 500 Index, Bloomberg U.S. Aggregate Bond Index and NFI-ODCE Index; as of 4Q2025. "Risk" is represented by standard deviation.
Impact of Adding Private Real Estate
Moderately conservative portfolios could have benefitted from private real estate's ability to reduce volatility while maintaining attractive returns above 6.54%. The allocation balances income stability with modest growth potential, ideal for investors seeking reduced risk without sacrificing meaningful returns.
57% Bonds
38% Stocks
5% Private Real Estate
Risk impact
7.94% ↓ 0.44pp
Return impact
6.63% ↓ 0.02pp
54% Bonds
36% Stocks
10% Private Real Estate
Risk impact
7.57% ↓ 0.81pp
Return impact
6.60% ↓ 0.05pp
52% Bonds
34% Stocks
15% Private Real Estate
Risk impact
7.27% ↓ 1.11pp
Return impact
6.58% ↓ 0.07pp
48% Bonds
32% Stocks
20% Private Real Estate
Risk impact
7.05% ↓ 1.33pp
Return impact
6.54% ↓ 0.11pp
Key takeaway
At 10% allocation, this portfolio would have lowered risk towards the level of a conservative 20/80 portfolio while delivering returns closer to its original 40/60 allocation—offering powerful risk-return optimization potential for moderately conservative investors.
Moderate Portfolio
Traditional Balanced Approach
40% Bonds
60% Stocks
0% No Private Real Estate
20 year risk
11.20%
20 year return
8.21%
For illustrative purposes only. Hypothetical portfolio results shown do not represent the performance of an actual investment. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Diversification does not assure a profit or protect against market loss. All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Stock, bonds and private real estate are respectively represented by the S&P 500 Index, Bloomberg U.S. Aggregate Bond Index and NFI-ODCE Index; as of 4Q2025. "Risk" is represented by standard deviation.
Impact of Adding Private Real Estate
The classic 60/40 portfolio can potentially gain significant stability through private real estate allocation. Even modest 5% exposure would have reduced volatility by over 5% while sacrificing just 1% of returns. This demonstrates private real estate's powerful diversification capability within balanced portfolios seeking growth with enhanced stability.
38% Bonds
57% Stocks
5% Private Real Estate
Risk impact
10.63%↓0.57pp
Return impact
8.12%↓0.09pp
36% Bonds
54% Stocks
10% Private Real Estate
Risk impact
10.12%↓1.08pp
Return impact
8.02%↓0.19pp
34% Bonds
51% Stocks
15% Private Real Estate
Risk impact
9.66%↓1.54pp
Return impact
7.93%↓0.28pp
32% Bonds
48% Stocks
20% Private Real Estate
Risk impact
9.27%↓1.93pp
Return impact
7.82%↓0.39pp
Key takeaway
At 15% private real estate, moderate portfolios would have achieved optimal balance—13.7% risk reduction while maintaining returns just under 8%. This represents an ideal potential allocation for growth-oriented investors seeking enhanced stability without compromising return potential.
Moderately Aggressive Portfolio
Growth-Oriented Strategy
20% Bonds
80% Stocks
0% No Private Real Estate
20 year risk
14.21%
20 year return
9.66%
For illustrative purposes only. Hypothetical portfolio results shown do not represent the performance of an actual investment. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges. Diversification does not assure a profit or protect against market loss. All investments involve risk, including loss of principal. Past performance is no guarantee of future results. Stock, bonds and private real estate are respectively represented by the S&P 500 Index, Bloomberg U.S. Aggregate Bond Index and NFI-ODCE Index; as of 4Q2025. "Risk" is represented by standard deviation.
Impact of Adding Private Real Estate
Even growth-focused portfolios can benefit from private real estate diversification. Allocations from 5-20% have historically provided meaningful volatility reduction while preserving over 94% of baseline returns, demonstrating that aggressive investors can enhance risk-adjusted performance without sacrificing growth objectives.
19% Bonds
76% Stocks
5% Private Real Estate
Risk impact
13.50% ↓ 0.71pp
Return impact
9.51% ↓ 0.15pp
18% Bonds
72% Stocks
10% Private Real Estate
Risk impact
12.84% ↓ 1.37pp
Return impact
9.36% ↓ 0.30pp
17% Bonds
68% Stocks
15% Private Real Estate
Risk impact
12.22% ↓ 1.99pp
Return impact
9.20% ↓ 0.46pp
16% Bonds
64% Stocks
20% Private Real Estate
Risk impact
11.65% ↓ 2.56pp
Return impact
9.04% ↓ 0.62pp
Key takeaway
At maximum 20% allocation, aggressive portfolios would have achieved 18% risk reduction while maintaining returns above 93% of the baseline—demonstrating that growth strategies can incorporate private real estate for improved risk-adjusted performance without compromising long-term appreciation potential.
^ Investor: a person or company responsible for managing investments on behalf of a financial institution or its clients.
Index definitions
NCREIF Fund Index – Open End Diversified Core Equity Index (NFI-ODCE)
The NFI-ODCE Index includes open-end commingled funds pursuing a core investment strategy, primarily investing in private equity real estate. This is a quarterly, capitalization-weighted, gross-of-fee, time-weighted return index with an inception date of December 31, 1977.
NAREIT Equity REIT
NAREIT Equity REIT Index is an index designed to provide the most comprehensive assessment of overall industry performance and includes all tax-qualified real estate investment trusts (REITs) that are listed on the New York Stock Exchange, the NYSE AMEX Equities or the NASDAQ National Market List.
Bloomberg US Aggregate Bond Index
The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency).
Standard & Poor’s 500 Index (S&P 500)
The S&P 500 Index is a capitalization-weighted index of 500 large U.S. stocks. The index is designed to capture the returns of many different sectors of the U.S. economy. The total return calculation includes the price-plus-gross cash dividend return.
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