And is it a fiduciary issue to ignore it? Cohen & Steers’ Charlie Wenzel explains.
The video titled “Real Estate in 401k Investment. Charlie Wenzel Explains” features an interview between 401(k) Specialist and Charlie Wenzel from Cohen & Steers at the NAPA 401(k) Summit in Las Vegas. They discuss the role of real estate in defined contribution plans, specifically within 401(k) plans.
Key Points:
- Volatility Concerns: Many advisors avoid including real estate in their lineups due to concerns about volatility. However, real estate is one of the best-performing asset classes over the past 10-20 years, and it is a familiar and significant asset class in the U.S.
- Long-Term Investing: Despite concerns, real estate is suitable for long-term retirement plans. It is already included in some target date funds and model portfolios, though not universally.
- Fiduciary Responsibility: Wenzel emphasizes that fiduciaries should consider real estate as it is the third-largest asset class and has been made a sector in the S&P 500. Institutional investors often allocate 10-12% to real estate.
- White Paper: Cohen & Steers has a white paper available on their website, discussing the fiduciary responsibilities and benefits of including real estate in a diversified portfolio.
For more details, you can view the video.
