Q2 2026 Fund Commentary

Commentary and opinions are provided by Cohen & Steers Capital Management, Inc..

Market commentary

Diversified real assets rose but lagged broader global equities amid energy price volatility. Investors favoured growth-oriented stocks amid expectations of a swift resolution to the Middle East conflict. After spiking above US$110 a barrel, crude oil prices returned to pre-conflict levels with the resumption of traffic through the Strait of Hormuz. Meanwhile, earnings results, particularly among large-capitalization information technology companies, exceeded expectations. Among the real assets categories, strength in global real estate securities was offset by weakness in commodities and natural resource equities.

Global real estate securities gained. U.S. real estate investment trusts (REITs) rose based on strengthening fundamentals. Hotels benefited from demand for U.S. resorts as well as group, leisure and business travel. Office and retail properties were also up. European listed real estate securities rose. In Spain, a diversified REIT reported growth momentum, with progress in its data-centre business. In France, retail operators benefited from a resilient European consumer. The Asia Pacific region trailed. Australian REITs rose. Singapore rose, driven by industrial and retail companies. Japan was weak, driven in part by higher yields. In Hong Kong, markets were weighed down by weak China domestic data and the lack of policy response, and concerns about U.S. interest-rate hikes.

Global listed infrastructure stocks rose. Passenger transportation performed well following easing geopolitical tensions and travel restrictions. Airports, railways and toll roads also performed well. Midstream energy had positive returns, and electric utilities gained. Marine ports was the weakest-performing sector, and water utilities underperformed.

Performance

At an industry level, security selection in global listed infrastructure contributed to the Fund’s performance, led by midstream energy companies, electric utilities and marine ports. Underweight exposure to commodities contributed. Contract selection in short-duration fixed income also contributed.

The Fund’s underweight exposure to a U.S.-based liquefied natural gas operator contributed to performance. Exposure to a U.S.-based electric utility company contributed as it benefited from electricity demand from data centres. The Fund’s exposure to a Philippines-based container terminal operator contributed.

Overweight exposure to natural resource equities detracted from the Fund’s performance, as did underweight exposure to global real estate. Stock selection in natural resource equities detracted, as did underweight exposure to diversified metals and mining and agricultural products. Stock selection in global real estate also detracted.

Exposure to a Netherlands-based food processing company detracted from performance amid protein sector weakness, inflationary pressures and macroeconomic uncertainty. A lack of exposure to an Australian mining company detracted as its shares rose on record copper production and raised output forecasts. Overweight exposure to a Switzerland-based agribusiness detracted amid regulatory concerns related to its merger with a Dutch agribusiness company and ongoing weakness in agricultural commodity markets.

Portfolio activity

Deere & Co. was added for its defensive characteristics. Phillips 66 was added to the Fund for its refining fundamentals, free cash flow and long-term growth opportunities. Nucor Corp. was purchased for its valuation relative to peers.

The sub-advisor took advantage of an equity offering from Entergy Corp. to add to the Fund’s existing position. Franco-Nevada Corp. was increased based on the potential restart of its Cobre Panama project. SLB Ltd. (formerly Schlumberger Ltd.) was increased because of a potential Middle East de-escalation.

AGCO Corp. was sold in favour of a holding in Deere & Co. CenterPoint Energy Inc. was sold on valuation concerns and increasing regulatory risk. Pilgrim’s Pride Corp. was sold in favour of a holding the sub-advisor believes has more liquidity and better valuation. Crown Castle Inc. was reduced after its share price recovered. Shell PLC was reduced after strong share price performance. Sempra Energy was reduced after its stock recovered.

Outlook

The sub-advisor expects the shift toward more capital-intensive industries to continue. Inflation, elevated bond yields and rising physical investment needs favour assets with tangible cash flows, pricing power and infrastructure relevance. A U.S.-Iran truce should reduce the risk of an oil-price super-spike, but risks remain given depleted inventories and damaged infrastructure.

The Fund has overweight exposure to natural resource equities based on growth expectations and anticipated oil-price upside. The Fund’s overweight exposure to global infrastructure reflects a positive growth profile and defensive risk attributes. The Fund holds overweight exposure in its short-duration fixed income sleeve, reflecting the sub-advisor’s cautious risk stance. The Fund has underweight exposure to commodities. While the sub-advisor has a positive outlook for global real estate, the Fund has an underweight exposure to global real estate based on its weaker growth profile.