Investing in the technology sector and in the securities of technology-related companies in other sectors will be more affected by the performance of the technology sector than investments that are more diversified, thereby increasing vulnerability to economic, political, or regulatory developments impacting technology companies and companies that rely heavily on technology, which will have a greater impact on returns.
Non-diversified investments may result in a loss a particular security or sector which will have a greater impact overall investor returns. Commodities and commodity-linked notes may be speculative and more volatile than investments in more traditional equity and debt securities, which may be subject to counterparty risk, volatility risk, and leverage; and derivative securities may carry market, credit, counterparty, leverage, and liquidity risks. Treasury inflation-protected securities (TIPS) are inflation index bonds that may experience greater losses than other fixed income securities with similar durations. Fixed income investments are subject to interest rate risk, credit risk, and illiquidity risk. Real estate poses certain risks related to overall and specific economic conditions as well as risks related to individual property, credit, and interest rate fluctuations. Real estate investment trusts (REITs) may not be suitable for all investors. There is no guarantee a REIT will pay distributions given the inherent risks associated with the market. A REIT may fail to qualify as a REIT as defined in the tax code, which could affect operations and negatively impact the ability to make distributions. There is no guarantee a REIT’s investment objectives will be achieved. Asset allocation and diversification do not assure a profit or protect against loss in declining markets.
ESG methodology may result in an investment forgoing opportunities to make certain investments when it might otherwise be advantageous to do so, or sell investments based on its ESG methodology criteria when it might be otherwise disadvantageous for it to do so. In evaluating an issuer, a subadviser is dependent upon information and data, including from third party data providers, that may be incomplete, inaccurate, or unavailable, or that may present conflicting information and data with respect to an issuer, which in each case could cause a subadviser to incorrectly assess and issuer’s business practices with respect to ESG. Issuers that are assigned a higher ESG Impact Rating by a subadviser may underperform similar issuers that have a lower ESG Impact Rating and/or may underperform the market as a whole. As a result, an investment may underperform investments that do not screen or score companies based on ESG factors or investments that use a different ESG methodology. ESG Impact Ratings are inherently subjective and a subadviser’s assessment of an issuer, based on the issuer’s level of involvement in a particular industry or the issuer’s ESG Impact Rating may differ from that of other investments or investors.
Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information, nor do we make any express or implied warranties or representations as to the completeness or accuracy. Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated, based on assumptions, subject to significant revision, and may change materially as economic and market conditions change.
Past performance is no guarantee of future results. The views expressed herein are those of PGIM Real Estate investment professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute investment advice or an offer to sell or a solicitation to buy any securities mentioned herein. This commentary does not purport to provide any legal, tax, or accounting advice. Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice.