REAL ASSETS | Global

Three strategies for building inflation-resilient portfolios

Extraordinary policy measures may be tilting inflation risks to the upside, reinforcing the need for diversifying investments that tend to respond well to unexpected inflation.

KEY TAKEAWAYS

Global real estate securities Global listed infrastructure Real assets multi-strategy Rent growth has historically Many infrastructure assets have A diversified real assets outpaced inflation, while property pricing mechanisms that include allocation has historically values may benefit as higher costs rate escalators linking user fees delivered equity-like returns for land, labor and materials raise to inflation, while a stronger with reduced volatility and the economic threshold for economy has typically driven higher strong relative performance in new supply. throughput and cash flows. inflationary periods. Three strategies for building inflation-resilient portfolios

Introduction Looking to a secular turn in inflation and interest rates by Michael Penn

EXHIBIT 1 Long-term inflation pressures are building Today’s subdued inflation outlook Recent market attention has been acutely focused on the spike in U.S. headline indicates potential upside risk inflation, which has accelerated from near zero to 2.6% over the past year.(1) This Market inflation outlook based short-term increase has been well telegraphed considering that conditions today on breakeven inflation rates are the mirror opposite from a year ago, with global growth in 2021 on course to potentially hit a 50-year high. The recovery in oil prices, supply chain disruptions % Current and a reopening economy suggest inflation could peak above 3% in the next few months before settling back to just above 2% for the remainder of the year. % Further out, however, we believe the market’s flat inflation expectations over the % 2010 long run underestimate the potential impact of $30 trillion(1) in global fiscal and monetary stimulus and more inflation-tolerant central bank policies: %           • Governments are borrowing far more today than post-financial crisis. Low Years out interest rates have given policymakers incentive to increase spending on a historic scale to fill the shortfall in demand, funding a long list of projects around pandemic relief, infrastructure, health care, climate change initiatives At March 1, 2021. Source: Refinitiv Datastream, Cohen & Steers analysis. Breakeven inflation rates are a measure of expected inflation, derived and measures to address inequality. from Treasury Constant Maturity Securities and Treasury Inflation- Indexed Constant Maturity Securities. The latest value implies what • The spending wave is a global phenomenon. In addition to the aggressive market participants expect the average inflation rate to be over the next 30 years. There is no guarantee that any inflation outlook will be realized. fiscal plans coming from the United States, even traditionally fiscal See page 11 for additional disclosures. conservative countries (notably Germany) are loosening their grip on the purse strings, likely pointing to more fiscal stimulus, not less.

• Closing output gaps may turn up the heat on inflation. These measures would likely accelerate demand growth and support tighter labor markets, generating wage inflation.

• Central banks want inflation expectations higher, not lower. The Federal Reserve and other central banks have communicated a willingness to let inflation run “hot,” likely keeping interest rates lower for longer to aid a faster recovery. This, in turn, may encourage governments to continue borrowing long after a recovery is underway.

Considering these factors, we believe risks to inflation are tilted to the upside. Whereas markets had a more optimistic view of long-term inflation following the financial crisis (which subsequently disappointed), the current outlook is more pessimistic, creating conditions for a potential inflation surprise (Exhibit 1).

(1) U.S. Consumer Price Index as of March 2021. Source: U.S. Bureau of Labor Statistics. (2) BofA Securities Global Research; March 25, 2021 ($28 trillion), plus President Biden’s $2+ trillion infrastructure plan.

2 Real assets may help manage inflation risks With inflation potentially underpriced, we believe the risks of inflation may be as high as they have ever been from a portfolio perspective, with bonds offering low yields and facing potential headwinds from rising long-term interest rates and equity markets highly concentrated in high-duration large-cap growth stocks. This creates an opportunity to add inflation sensitivity to portfolios with assets that offer the potential to maintain or enhance long-term expected returns.

Listed real assets—which we define as encompassing real estate securities, listed infrastructure, natural resource equities and commodities—have historically had positive correlations with unexpected inflation (Exhibit 2). The reasons for higher inflation betas within real assets categories can be found on a closer examination of their distinct inflation-linked economic drivers.

EXHIBIT 2 Real assets have historically outperformed in periods of unexpected inflation Beta to inflation surprise (realized vs. prior-year expectation) May 1991 – March 2021

The “core 4” listed real assets





 



   Bonds US Global Real assets Global real Global Natural resource Commodities stocks stocks multi strategy estate infrastructure equities

At March 31, 2021. Source: Bloomberg, Thomson Reuters Datastream, Cohen & Steers proprietary analysis. Data quoted represents past performance, which is no guarantee of future results. The chart above is for illustrative purposes only and does not reflect the performance of any fund or account managed or serviced by Cohen & Steers. There is no guarantee that investors will experience the type of performance reflected above. An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. Index comparisons have limitations as volatility and other characteristics may differ from a particular investment. Inflation beta calculates the linear regression beta of 1-year real returns to the difference between the year-over-year realized inflation rate and lagged 1-year ahead expected inflation, including the level of the lagged expected inflation rate. Expected inflation as measured reflects median inflation expectation from University of Michigan Survey of 1-Year Ahead Inflation Expectations. Realized Inflation is measured by the Consumer Price Index for all Urban Consumers, published by the U.S. Bureau of Labor Statistics. Linear regression is a statistical method that models the relationship between a dependent variable and one or more explanatory variables. See page 11 for index associations, definitions and additional disclosures.

Heightened inflation sensitivity is a characteristic common to real assets due to their inflation-linked economic drivers

3 Three strategies for building inflation-resilient portfolios

Global real estate securities by Jon Cheigh and Jason Yablon

Higher inflation, higher rents, higher dividends Real estate has historically benefited from inflationary environments: 3.1 • Property values tend to rise with the overall price environment, as higher prices for Inflation beta labor, land and materials used in construction can raise the economic threshold for new development. This, in turn, may constrain new supply, supporting higher occupancies and giving landlords greater power to raise rents. See Exhibit 2 • Property types with shorter lease durations such as hotels, self storage, apartments, senior housing and billboards can take advantage of inflationary rents relatively quickly. • Many commercial leases have explicit inflation links, particularly outside the U.S., with rent escalators tied to a published inflation rate.

The net effect has been that REIT dividends have historically grown faster than inflation (Exhibit 3). Following pandemic-driven dividend cuts in 2020, we expect REITs may deliver above-average dividend growth over the next few years, just as we saw post-2009. Though the pandemic has accelerated changes in how certain real estate is utilized (some positively, others negatively), we believe the potential for REITs to grow rents faster than inflation remains unchanged.

Rising rents have historically mattered more than rising rates Despite the perception that periods of rising Treasury yields are often negative for REITs, history suggests that the direction of the economy and job growth tend to have a greater impact on REIT returns than higher interest rates. Since 1990, REITs have had a 10.8% annualized return in months when both the 10-year Treasury yield and U.S. Leading Economic Indicators were rising (Exhibit 4). An expanding economy typically drives stronger demand, supporting the potential for increased property cash flows to help offset the effect of higher interest rates on capital costs and real estate capitalization rates.

EXHIBIT 3 EXHIBIT 4 REIT dividends have grown faster than inflation REITs have historically performed well when growth and yields are both rising US REIT dividend growth US CPIa 1990–2020(b) % US REIT dividend growth % Annual average Bond yields up %  % US CPI Annual average 0.2% 10.8% % average average % 11.5% Growth long-term Growth % falling buy-and-hold rising return % 16.2% 18.0% % average average %           Bond yields down

At December 31, 2020. Nareit (REIT dividend growth), Cohen & Steers analysis. At December 31, 2020. Source: Refinitiv Datastream, Cohen & Steers analysis. Data quoted represents past performance, which is no guarantee of future results. (a) U.S. Consumer Price Index. (b) Period since 1990 selected based on common available index and economic data. Bond yields based on the 10-year U.S. Treasury note. Economic growth measured by Cohen & Steers’ U.S. Leading Economic Indicator (LEI), comprised of six cyclical macro factors that have historically signaled turning points in broad economic growth. Annualized total return is the average annualized arithmetic return earned in each distinct phase of economic growth and bond yields. The information presented above does not reflect the performance of any fund or account managed or serviced by Cohen & Steers, and there is no guarantee that investors will experience the type of performance reflected above. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend will begin. See page 11 for index associations, definitions and additional disclosures. 4 Global listed infrastructure by Ben Morton

Inflation-linked revenues and rising volumes Infrastructure has historically had a strong association with unexpected inflation, as revenues are often directly or indirectly tied to inflationary trends. Many 5.3 infrastructure assets receive contractual adjustments to user fees that provide Inflation beta either fixed annual increases approximating inflation, or variable increases linked to consumer or producer price changes (Exhibit 5). Transportation-oriented concession- See Exhibit 2 based agreements with local governments typically allow for annual local inflation- linked price increases, while regulated utilities often benefit from the ability to recoup higher costs associated with inflation in their periodic reviews with regulators.

Furthermore, certain subsectors, particularly in transportation, may stand to benefit from rising throughput in a strengthening economy. For example, freight rail volumes have benefited from the recovery of the goods-based economy, driven by increasing online orders and a broader trend of inventory restocking (Exhibit 6).

Interest-rate reactions historically followed by strong returns Rising interest rates could pose a near-term risk to infrastructure performance, as sharp increases in Treasury yields may cause an initial negative reaction. However, following rate-driven pullbacks, infrastructure has historically outperformed global equities over the ensuing 3-, 6- and 12-month periods, as the benefits of stronger economic growth and inflation were eventually reflected in revenues.(1)

EXHIBIT 5 EXHIBIT 6 Inflation pass-through characteristics depend on the sector Freight rail volumes are benefiting from a strengthening economy Infrastructure Sub-sectors Year-over-year change in carloads revenue models (index weight) Inflation linkage

Jan % Regulated Electric (40%) Inflation factored in when determining consumer rates % Gas distribution (6%) and included in utility project costs that can afect a % Water (4%) utility’s rate base. %

Concession-based Toll roads (10%) Local government agreements allow service rate % Airports (10%) increases based on fixed amounts above inflation rate. Temporary rail % closures due to winter storms Contracted Freight rails (7%) Contracted rates typically include escalators if inflation  % (GDP sensitive) Ports (3%) exceeds a specified level; economic-sensitive volumes Jan Mar May Jul Sep Nov Jan Mar Midstream (10%) can indirectly ofset inflation.  

Contracted Communications (9%) Most service contracts include fixed revenue escalators At March 31, 2021. Source: Association of American Railroads. There is no guarantee that any historical trend illustrated above will be repeated (secular driven) (often 3-4% per year) to ofset inflation impact. in the future, and there is no way to predict precisely when such a trend will begin. The mention of specific sectors is not a recommendation or solicitation to buy, sell or hold any particular security and should not be relied upon as investment advice. At December 31, 2020. Source: Bloomberg index weights, Cohen & Steers analysis.

(1) Based on the 12 largest one-month increases in the 10-year Treasury yield from January 2000 to March 2021. See page 11 for index associations, definitions and additional disclosures. 5 Three strategies for building inflation-resilient portfolios

Real assets multi-strategy by Vince Childers

Inflation sensitivity: The unifying attribute of real assets Real assets have a history of helping portfolios during market conditions that tend to be challenging for both stocks and bonds, enhancing the diversification potential 5.4 of traditional asset allocation mixes. The most common of these market scenarios Inflation beta has been the occurrence of unexpected inflation. Whereas inflation surprises have historically had a mixed effect on stocks and bonds, real assets have demonstrated See Exhibit 2 strong, positive correlations, indicating a tendency to deliver above-average returns when inflation exceeds expectations (Exhibit 2, page 3).

The persistence of surprisingly low inflation over the past decade has worked against real assets, contributing to their underperformance in recent years, particularly in commodities. However, with real assets now trading near multi-decade relative lows (Exhibit 9, page 9), we believe more attractive relative value, combined with increased inflation risk and improving fundamentals, has created a particularly compelling backdrop.

A real assets blend offers potential diversification benefits One way to gain broad exposure to real assets is through a portfolio that invests across categories such as real estate, infrastructure, commodities and natural resource equities. Each of these asset classes has distinct economic sensitivities that have historically resulted in diversifying correlations with each other and with stocks and bonds. As a result, a diversified blend of real assets may offer an effective way for investors to target common objectives of a real assets allocation—such as enhancing diversification, expected returns and inflation sensitivity—while potentially dampening the swings that investors may experience with separate allocations to individual asset classes (Exhibit 7).

EXHIBIT 7 % US stocks A real assets blend has the Global listed potential for equity-like returns % infrastructure Global real estate with lower volatility % Bonds Global stocks Natural resource Performance characteristics Real assets equities May 1991 – March 2021 multi-strategy Annualized return % Commodities % % % % % Standard deviation

Global Global real Global listed Natural resource Real assets Bonds U.S. stocks stocks estate infrastructure equities Commodities multi-strategy Annualized nominal return (%) 6.1 10.3 7.7 9.1 9.9 7.5 1.0 6.6 Annualized real return (%) 3.8 8.0 5.5 6.8 7.6 5.2 -1.3 4.3 Standard deviation (%) 6.1 14.6 14.7 16.7 14.2 18.4 15.3 11.5 Sharpe ratio 0.61 0.58 0.42 0.46 0.57 0.35 -0.02 0.41

At March 31, 2021. Source: Bloomberg, Dow Jones, FTSE, S&P, St. Louis Fed, Thomson Reuters Datastream, Cohen & Steers calculations. Data quoted represents past performance, which is no guarantee of future results. The chart above is for illustrative purposes only and does not reflect the performance of any fund or account managed or serviced by Cohen & Steers. There is no guarantee that investors will experience the type of performance reflected above. An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. Index comparisons have limitations as volatility and other characteristics may differ from a particular investment. Standard deviation is a measure for variation of price of a financial instrument over time. Sharpe ratio is a measure of risk-adjusted return, calculated by subtracting the risk-free rate from a return and dividing that result by the standard deviation; the higher the Sharpe Ratio, the higher the risk-adjusted return. See page 11 for index associations, definitions and additional disclosures.

6 Matching real assets characteristics to objectives The performance profiles of different types of real assets show the flexibility in various exposures and/or combinations that may make sense depending on specific portfolio objectives (Exhibit 8). A multi-strategy diversified real assets solution may be well suited for providing greater levels of inflation beta, whereas real estate or global listed infrastructure assets may offer greater total return potential with enhanced inflation sensitivity. Additionally, most real assets tend to be effective portfolio diversifiers due to their distinct economic drivers.

EXHIBIT 8 Real assets characteristics Qualitative criteria based on realized historical data since June 1991

Diversification Expected Inflation Distinguishing Potential potential returns sensitivity features portfolio benefits

• Historically strong in most periods of economic growth • Total return Global real estate • Dividend growth typically outpacing inflation • Income

• Typically perform well during periods of rising • Low equity Commodities levels of economic activity correlation • Generally linked to demand/supply • Inflation sensitivity

Global natural • Forecasts of rising economic activity • Total return resource equities • Lead/lag with commodities • Inflation sensitivity

• Typically monopolistic and regulated structures • Total return Global infrastructure • Traditionally defensive • Stable cash flows

• Traditionally defensive • Reduces volatility Short duration • Historically maintain value during periods of • Inflation sensitivity fixed income & gold geopolitical and financial uncertainty • Income

Real assets Diversification Expected Inflation Low High potential returns sensitivity

At March 31, 2021. Source: Bloomberg, Cohen & Steers.

Gold may be more effective when paired with other real assets Over the period shown in Exhibit 2, gold had an inflation beta of 2.1, confirming its reputation as an inflation-sensitive vehicle. Still, our research suggests gold is typically far more sensitive to moves in real interest rates and the U.S. dollar than to changes in inflation. Due to gold’s history of high volatility, we believe it is better suited as an inflation hedge when combined with other real assets rather than as a standalone allocation.

7 Three strategies for building inflation-resilient portfolios

Three pillars of a potential sustained rally in commodities by Ben Ross

After a decade-long bear market, commodities are showing signs of life, as the Bloomberg Commodity Total Return index has reached its highest level since 2018 9.2 (as of March 31, 2021). We believe the ingredients may be in place for a sustained Inflation beta multi-year, broad-based commodities rally, driven by three key factors:

See Exhibit 2

Highly supportive • A vaccine-driven economic reopening and $30 trillion in global fiscal and macroeconomic backdrop monetary stimulus could drive the strongest global GDP growth since 1973. • The potential for a lasting economic recovery and above-trend global growth bodes well for a period of strong commodity consumption.

• China, a major consumer of commodities, is expected to grow close to 8.5% in 2021, despite recent policy normalization, further bolstering the synchronized global recovery and supportive demand environment.

Strongest supply-demand • Inventories of most commodities are at multi-year lows due to unprecedented fundamentals in a decade production discipline and a lack of investment in supply in the decade following the financial crisis.

• Low supply is poised to meet with a resounding snapback in demand, which we expect to be much stronger than a typical post-recession bounce.

• New sources of demand stemming from the green energy transition should add to the positive demand outlook for the next decade, while environmental considerations—including environmental, social and governance (ESG) factors— may create operational challenges and higher costs for new sources of supply.

Attractive portfolio benefits • Commodities have historically been one of the best ways to hedge unexpected could drive speculative inflows inflation, with an inflation beta of 9.2 (Exhibit 2)—indicating that for every 1% that inflation exceeded the prior-year estimate, commodities typically outperformed their long-term average by 9.2%.

• Commodities historically have had a low beta to global stocks (0.43 over the 1991+ period), adding to potential diversification benefits beyond inflation sensitivity.

• Valuations relative to both stocks and bonds are at their lowest points in at least 30 years at a time when many financial assets are richly priced.

8 Closing thoughts

With many real assets trading at attractive values relative to global equities, we believe 2021 is likely to be an attractive vintage year for allocating to real assets ahead of a potential turning point in inflation and interest rates.

• The increasing risk of upside inflation surprise does not necessarily mean a threat of runaway inflation, but it does suggest that current long-term inflation expectations may be too low. The historical unreliability of inflation forecasts suggests that the time to consider an inflation-sensitive allocation is before it is needed.

• The power in real assets is that real estate, infrastructure and multi-strategy real assets solutions each offer long-term performance profiles that have delivered inflation sensitivity when needed, and attractive risk-adjusted returns over longer time horizons.

• Following the uniquely challenging environment for real assets during the pandemic and years of successive downward inflation revisions, real estate, infrastructure, natural resource equities and commodities are all trading at historically attractive valuations relative to stocks and bonds (Exhibit 9), creating a potential value opportunity at a time of improving fundamentals.

EXHIBIT 9 Real assets offer a multi-decade relative value opportunity Relative valuation vs. MSCI World, % off peak May 1991–March 2021 Natural resource Real assets Global real Global listed Commodities equities multistrategy estate infrastructure The last time a real assets blend % was at today’s relative levels was October 2000. The group % 13-year low subsequently delivered strong % % 19-year low outperformance over 20-year low multiple years. 19-year low %

30-year low

At March 31, 2021. Source: Bloomberg, Refinitiv Datastream, Cohen & Steers analysis. Based on a ratio of month total return series of the respective asset classes to global equities, indexed to 1 on 5/31/1991. “Year low” represents number of years since the respective total return was equal or lower than the current level since May 1991: Commodities: currently at all-time-low; natural resource equities: Feb. 2002; real assets multi-strategy: Oct. 2000; global real estate: Dec. 2001; global listed infrastructure: Nov. 2007. Data quoted represents past performance, which is no guarantee of future results. The information presented above does not reflect the performance of any fund or other account managed or serviced by Cohen & Steers, and there is no guarantee that investors will experience the type of performance reflected above. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend will begin. An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes.

9 About the authors

Jon Cheigh, Executive Vice President, Chief and pipelines sectors. He also worked at Investment Officer and Head of Global Real New York Mercantile Exchange as a research Estate, leads the investment department analyst. Mr. Morton holds a BA from the and oversees the global real estate team, University of Rochester and an MES from serving as senior portfolio manager for all Yale University. He is based in New York. global real estate strategies. Mr. Cheigh joined the company in 2005 as a REIT analyst Michael Penn, Senior Vice President, is a Jon Cheigh and has served as a portfolio manager macro strategist responsible for providing since 2008. He was named Head of Global economic analysis and forecasts to Cohen Real Estate in 2012 and was appointed & Steers’ investment committees. He has Chief Investment Officer in 2019. Prior to 16 years of experience as an economist and joining the company, Mr. Cheigh was a vice strategist. Prior to joining the firm in 2011, president and senior REIT analyst at Security Mr. Penn was a macro strategist at Bank of Capital Research & Management. Prior to America Merrill Lynch, where he focused that, he was a vice president of real estate on global and emerging equity markets. acquisitions at InterPark and an acquisitions Mr. Penn has a BS in economics from the Vince Childers associate at Urban Growth Property Trust, University of Nottingham and an MS with two privately held real estate companies distinction in economics from University incubated by Security Capital Group. Mr. College, London. He is based in New York. Cheigh holds a BA degree cum laude from Williams College and an MBA degree from Ben Ross, Senior Vice President, is Head of the University of Chicago. Commodities and a portfolio manager for Cohen & Steers’ commodities strategy. He Vince Childers, CFA, Senior Vice President, has 27 years of experience. Prior to joining is Head of Real Assets Multi-Strategy and the firm in 2013, Mr. Ross was a co-portfolio Benjamin Morton a portfolio manager for Cohen & Steers’ manager at GE Asset Management and a real assets strategy. He has 21 years of manager of the GE Active Commodities investment experience. Prior to joining the strategy since its 2006 inception. Previously, firm in 2013, Mr. Childers was a portfolio Mr. Ross was a senior trader at GE Asset manager for real asset strategies at Management, leading the international AllianceBernstein, where he co-managed equity trading desk. Before joining GE in a research team overseeing $2.3 billion 1996, he worked at State Street Bank & in assets. Previously, Mr. Childers was an Trust. Mr. Ross has a BS from Northeastern associate in the financial advisory services University and is based in New York. Michael Penn department of Houlihan Lokey. Mr. Childers has an MBA from Carnegie Mellon University Jason A. Yablon, Senior Vice President, and a BS from Vanderbilt University. He is is Head of U.S. Real Estate and a senior based in New York. portfolio manager for U.S. real estate securities portfolios and oversees the Benjamin Morton, Executive Vice President, research process for U.S. real estate is Head of Global Infrastructure and a senior securities. He has 21 years of experience. portfolio manager for Cohen & Steers’ Prior to joining Cohen & Steers in 2004, infrastructure portfolios, including those Mr. Yablon was a sell-side analyst at Ben Ross focused on master limited partnerships. Morgan Stanley for four years, focusing He has 22 years of infrastructure-related most recently on apartment and health investment experience. Prior to joining care REITs. Mr. Yablon has a BA from the Cohen & Steers in 2003, Mr. Morton worked University of Pennsylvania. He is based in at Salomon Smith Barney as a research New York. associate for three years, covering the utility

Jason Yablon

10 Index definitions and important disclosures An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. Index comparisons have limitations as volatility and other characteristics may differ from a particular investment. Bonds: ICE BofA U.S. 7-10 Year Treasury Index is a subset of the ICE BofA US Treasury Index including all securities with a remaining term to final maturity greater than or equal to 7 years and less than 10 years.Commodities: S&P GSCI Index through July 1998 and Bloomberg Commodity Total Return Index thereafter. The S&P GSCI Index is a composite of commodity sector returns representing an unleveraged, long-only investment in commodity futures that is broadly diversified across the spectrum of commodities, calculated on a fully collateralized basis with full reinvestment. The Bloomberg Commodity Total Return Index, formerly known as the Dow Jones-UBS Commodity Index, is a broadly diversified index that tracks the commodity markets through commodity futures contracts. The index is made up of exchange-traded futures on physical commodities, which are weighted to account for economic significance and market liquidity.Global listed infrastructure: 50/50 Blend of Datastream World Pipelines and Datastream World Gas, Water and Multi-Utilities through July 2008; Dow Jones Brookfield Global Infrastructure Index thereafter. The Dow Jones Brookfield Global Infrastructure Index is a float-adjusted market-capitalization-weighted index that measures performance of globally domiciled companies that derive more than 70% of their cash flows from infrastructure lines of business. Global natural resource equities: 50/50 Blend of Datastream World Oil &Gas and Datastream World Basic Materials through May 2008; S&P Global Natural Resources Index thereafter. The Datastream World Index Series encompasses global indexes of companies in their respective sectors (Gas, Water & Multi-Utilities; Materials; Oil & Gas; and Pipelines) compiled by Thomson Reuters Datastream. S&P Global Natural Resources Index includes 90 of the largest publicly traded companies in natural resources and commodities businesses that meet specific investability requirements, offering investors diversified, liquid and investable equity exposure across three primary commodity-related sectors: Agribusiness, Energy and Metals & Mining. Global real estate: FTSE Nareit Equity REIT Index through February 2005 and FTSE EPRA Nareit Developed Index thereafter. FTSE EPRA Nareit Developed Index is an unmanaged market-weighted total return index which consists of many companies from developed markets who derive more than half of their revenue from property-related activities. Global stocks: The MSCI World Index is a free float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets. U.S. real estate: FTSE Nareit All Equity REIT contains all tax-qualified REITs with more than 50% of total assets in qualifying real estate assets other than mortgages secured by real property that also meet minimum size and liquidity criteria.U.S. stocks: The S&P 500 Index is an unmanaged index of 500 large-capitalization stocks that is frequently used as a general measure of US stock market performance. Real assets multi-strategy: A blend of 27.5% global real estate, 27.5% commodities, 15% global listed infrastructure, 15% natural resource equities, 10% short-duration fixed income and 5% gold. Short-duration fixed income: The ICE BofA US Corporate 1-3 Year Index tracks the performance of U.S. dollar- denominated investment-grade rated corporate debt publicly issued in the U.S. domestic market with a remaining term to maturity of less than 3 years. Gold is represented by the gold spot price, in U.S. dollars per Troy ounce. Data quoted represents past performance, which is no guarantee of future results. The information presented above does not reflect the performance of any fund or other account managed or serviced by Cohen & Steers, and there is no guarantee that investors will experience the type of performance reflected above. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any market forecast made in this document will be realized. The views and opinions in the preceding document are as of the date of publication and are subject to change without notice. This material represents an assessment of the market environment at a specific point in time and should not be relied upon as investment advice, does not constitute a recommendation to buy or sell a security or other investment and is not intended to predict or depict performance of any investment. This material is not being provided in a fiduciary capacity and is not intended to recommend any investment policy or investment strategy or take into account the specific objectives or circumstances of any investor. We consider the information in this presentation to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of appropriateness for investment. Cohen & Steers does not provide investment, tax or legal advice. Please consult with your investment, tax or legal professional regarding your individual circumstances prior to investing. Risks of investing in real estate securities. The risks of investing in real estate securities are similar to those associated with direct investments in real estate, including falling property values due to increasing vacancies or declining rents resulting from economic, legal, political or technological developments, lack of liquidity, limited diversification and sensitivity to certain economic factors such as interest rate changes and market recessions. Risks of investing in global listed infrastructure. Investments in global infrastructure securities will likely be more susceptible to adverse economic or regulatory occurrences affecting global infrastructure companies than an investment that is not primarily invested in global infrastructure companies. Infrastructure issuers may be subject to regulation by various governmental authorities and may also be affected by governmental regulation of rates charged to customers, operational or other mishaps, tariffs, and changes in tax laws, regulatory policies, and accounting standards. Risks of investing in foreign securities. Foreign securities involve special risks, including currency fluctuations, lower liquidity, political and economic uncertainties and differences in accounting standards. Some international securities may represent small- and medium-sized companies, which may be more susceptible to price volatility and less liquidity than larger companies. Risks of investing in commodities. An investment in commodity-linked derivative instruments may be subject to greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. Among the risks presented are market risk, credit risk, counterparty risk, leverage risk and liquidity risk. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. Futures trading is volatile, highly leveraged and may be illiquid. Investments in commodity futures contracts and options on commodity futures contracts have a high degree of price variability and are subject to rapid and substantial price changes. Such investments could incur significant losses. There can be no assurance that the options strategy will be successful. The use of options on commodity futures contracts is to enhance risk-adjusted total returns. The use of options, however, may not provide any, or only partial, protection for market declines. The return performance of the commodity futures contracts may not parallel the performance of the commodities or indexes that serve as the basis for the options it buys or sells; this basis risk may reduce overall returns. Risks of investing in natural resource equities. The market value of securities of natural resource companies may be affected by numerous factors, including events occurring in nature, inflationary pressures and international politics. Cohen & Steers Capital Management, Inc. (Cohen & Steers) is a registered investment advisory firm that provides investment management services to corporate retirement, public and union retirement plans, endowments, foundations and mutual funds. Cohen & Steers UK Limited is authorized and regulated by the Financial Conduct Authority of the United Kingdom (FRN 458459). Cohen & Steers Asia Limited is authorized and registered with the Hong Kong Securities and Futures Commission (ALZ367). Cohen & Steers Japan Limited is a registered financial instruments operator (investment advisory and agency business and discretionary investment management business with the Financial Services Agency of Japan and the Kanto Local Finance Bureau No. 3157) and is a member of the Japan Investment Advisers Association. Cohen & Steers Ireland Limited is regulated by the Central Bank of Ireland (No.C188319). Notes for readers in the Middle East: This document is for information purposes only. It does not constitute or form part of any marketing initiative, any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any products, strategies or other services nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract resulting therefrom. In the event that the recipient of this document wishes to receive further information with regard to any products, strategies other services, it shall specifically request the same in writing from us.

Publication Date: April 2021 Copyright © 2021 Cohen & Steers, Inc. All rights reserved.

11 We believe accessing investment opportunities around the world requires local knowledge and insight into specialized and regional markets. Cohen & Steers maintains a global presence through the following offices:

Americas Europe

NEW YORK LONDON DUBLIN Corporate Headquarters Cohen & Steers UK Limited Cohen & Steers Ireland Limited 280 Park Avenue, 10th Floor 50 Pall Mall, 7th Floor 77 Sir John Rogerson’s Quay, Block C New York, New York 10017 London SW1Y 5JH Grand Canal Docklands, Dublin 2 Phone 212 832 3232 United Kingdom D02 VK60, Ireland Fax 212 832 3622 Phone +44 207 460 6350 Phone +353 1 592 1780

Asia Pacific

HONG KONG TOKYO Cohen & Steers Asia Limited Cohen & Steers Japan Limited Suites 1201–02, Champion Tower Pacific Century Place, 16F 3 Garden Road 1-11-1 Marunouchi Chiyoda-ku Central, Hong Kong Tokyo 100–6216 Japan Phone +852 3667 0080 Phone +81 3 4530 4710

cohenandsteers.com | Advisors & Investors: 800 330 7348 | Institutions & Consultants: 212 822 1620

VP687_4-21