Real Assets Quarterly/media/Files/B...REAL ASSETS ALLOCATION As discussed above, our base case is an expectation that real assets, along with broader markets, grind higher from here

BROOKFIELD PUBLIC SECURITIES GROUP | REAL ASSETS 2Q 2020

Real Assets QuarterlyC A N T H E R E V E R S A L R A L L Y L A S T ?

The second-quarter rally was a sharp reversal from the pain of the first quarter (see the chart below). How quickly markets turned and unanimously advanced was surprising to us, especially given the bleak economic announcements we saw throughout the quarter and the continuing uncertainty. The key question for the second half of the year: Does the "about-face rally" have more room to run?

The second-quarter reversal came as central banks around the globe poured capital into financial systems. Toward quarter end, economies began to reopen, further spurring the risk-on trade seen across markets. The outlook from here is uncertain, though we see three potential scenarios for real assets.

Read more on our outlook and view for the second half on the following page.

As of June 30, 2020. Source: Bloomberg. Brookfield has no direct role in the day-to-day management of the Dow Jones Brookfield Global Infrastructure Composite Index. See index definitions at the end of this report. Past performance does not guarantee future results. Index performance is not indicative of the performance of a Brookfield investment.

P E R F O R M A N C E R E V I E W , A S O F J U N E 3 0 , 2 0 2 0

GLOBAL INFRASTRUCTURE EQUITIES2Q-2020

(%) YTD FTSE Global Core Infrastructure 50/50 Index 10.51 -12.97Dow Jones Brookfield Global Infrastructure Composite Index 11.55 -11.81ENERGY INFRASTRUCTURE EQUITIES Alerian Midstream Energy Index 32.63 -29.60Alerian MLP Index 50.18 -35.71GLOBAL REAL ESTATE EQUITIES FTSE EPRA Nareit Developed Index 10.33 -20.93MSCI US REIT Index 11.70 -18.45ICE BofA Preferred Stock REITs 7% Constrained Index 10.03 -2.70REAL ASSET DEBT ICE BofA USD Real Asset High Yield Custom Index 12.40 -6.12ICE BofA USD Real Asset High Yield & Corporate Custom Index 12.22 -3.22BROAD-MARKET BENCHMARKSMSCI World Index 19.54 -5.48S&P 500 Index 20.54 -3.08Bloomberg Barclays Global Aggregate Index 3.32 2.98ICE BofA Global High Yield Index 11.50 -4.22ICE BofA Global Corporate Index 8.68 2.65

H I S T O R I C A B O U T - F A C E : M A R K E T S R E B O U N D I N R A P I D F A S H I O N 2 0 2 0 Y T D R E A L A S S E T E Q U I T I E S I N D E X P E R F O R M A N C E 2 0 2 0 Y T D R E A L A S S E T D E B T A N D P R E F E R R E D S I N D E X P E R F O R M A N C E

As of June 30, 2020. Sources: Bloomberg, Brookfield PSG. See Disclosures for full index representations and definitions. Past performance does not indicate future results.

Global Equities Global Infrastructure EquitiesGlobal Real Estate Equities Energy Infrastructure

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O U T L O O K F O R T H E S E C O N D H A L F O F 2 0 2 0 : O U R B E A R , B A S E A N D B U L L S C E N A R I O S F O R R E A L A S S E T S

Several real asset sectors found themselves in the bull's-eye of COVID-19, significantly disrupting regular operations. While we are seeing more evidence of a V-shaped recovery, which may be positive for real asset equity performance, there are still several unknowns. This is an almost unprecedented virus pandemic, and new COVID-19 cases have spiked in recent weeks as people return to their normal activities. Adding to the uncertainty: The U.S. presidential election is still to come, likely bringing more market volatility.

Our base case for the second half is that real assets slowly grind higher, taking two steps forward and one step back, though we acknowledge the potential bear- and bull-case scenarios. We share our views below.

BEAR-CASE SCENARIO: ‘A Tale of Two Cities – Again’ COVID-19 cases meaningfully spike, and reopenings slow or reverse. The market would likely sell off broadly like we saw in Q1 2020, but not as deeply. Performance of real assets would likely split into two camps, similar to how the asset classes behaved during the initial sell-off. Retail, Transports and Energy Infrastructure would likely sell-off, while Utilities, Communications and Data Centers would likely hold up versus broader markets. However, the already-discounted valuations of affected real asset sectors and the defensive characteristics of many other real asset sectors may help mitigate pronounced underperformance.

BASE-CASE SCENARIO: ‘Two Steps Forward, One Step Back’ Markets grind higher with more good days than bad and, on the margin, the economic picture improves. Certain setbacks will likely occur, given the uncertainty of COVID-19, but they would not be severe enough to erase market gains. Real assets would likely tick upward along with broader markets, but we would not expect noteworthy outperformance or underperformance.

BULL-CASE SCENARIO: ‘The Bullseye Is Off Our Back’ The economy returns to normal more quickly than anticipated, and COVID-19-related restrictions (travel, business closures, etc.) would likely abate. Real assets could outperform as fundamental headwinds subside. Importantly, the significant valuation discounts seen across the affected real asset sectors could be an additional catalyst for outperformance.

REAL ASSETS QUARTERLY 2

O U R C U R R E N T V I E W S O N H O W T O P O S I T I O N A D I V E R S I F I E D R E A L A S S E T S A L L O C A T I O N

As discussed above, our base case is an expectation that real assets, along with broader markets, grind higher from here. Given this, we favor positioning to potentially take advantage of the rally, while maintaining a slight defensive bias. We are neutral across our strategic equity allocations. However, within the more senior parts of the capital structure, we favor real asset debt, as we believe greater upside exists there versus REIT preferreds.

O V E R W E I G H T O U T L O O K N E U T R A L O U T L O O K U N D E R W E I G H T O U T L O O K

G L O B A L I N F R A S T R U C T U R E

GLOBAL INFRASTRUCTURE EQUITIES' valuations are reasonable. We see upside potential across the sectors directly impacted by COVID-19, and the innate defensiveness of other sectors may provide some downside protection.

ENERGY INFRASTRUCTURE EQUITIES likely have the greatest upside potential in a risk-on market, given their higher beta versus other real asset equities. Valuations are attractive, and fundamentals have somewhat improved on the back of a tighter supply/demand picture.

R E A L E S TAT E

GLOBAL REAL ESTATE EQUITIES' valuations are discounted, and as the economic picture improves, we would expect improving fundamentals to follow in property sectors that saw challenges during the COVID-19 crisis.

REIT PREFERREDS experienced quite a run from the late-March lows. The sector is now trading at par, leaving limited upside, in our view.

R E A L A S S E T D E B T

REAL ASSET DEBT spreads are still wider relative to historical levels. Accordingly, real asset debt offers both upside potential and downside protection. Given the current uncertain environment, we believe this is an attractive allocation within a diversified real assets portfolio.

As of June 30, 2020. Source: Brookfield PSG. Underweight: Potentially decrease allocation versus a benchmark. Neutral: Consider benchmark allocation. Overweight: Potentially increase allocation versus a benchmark.


Global Infrastructure Equities

Global infrastructure equities rallied in the second quarter, as the Dow Jones Brookfield Global Infrastructure Composite Index returned 11.55% and the FTSE Global Core Infrastructure 50/50 Index returned 10.51%. Performance was strongest among airports and toll roads, while utilities lagged.

O N W A T C H

Perhaps the understatement of the century is to say the first half of 2020 was unexpected. The outlook for the rest of the year certainly has some uncertainty, but a few notable signposts could provide more clarity. Below we discuss what we are keeping an eye on.

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NEW COVID-19 CASES AND TRAFFIC LEVELS New COVID-19 cases will likely have a direct correlation to toll road and airport traffic levels. Driving levels have hit a high for 2020 as people avoid public transportation. (See the chart to the right). This may be an ongoing theme for the near term, supporting crude oil demand. Airport traffic levels have likely already hit their lows, but any substantial recovery in 2020 will be highly dependent on travel restrictions easing, which, in turn, is largely dependent on a decrease in new COVID-19 cases.

WILL UTILITIES RETURN TO FAVOR? It is not surprising that utilities would lag broader equities in a risk-on environment, but the performance gap this quarter was stark. Relative utility valuations are at their lowest levels in a decade (see the chart to the right). Yet sector earnings are still growing and demand, by nature, is stable. In an environment where the true impact to earnings has likely yet to be fully captured, the predictability of utilities sector earnings may be welcomed by investors.

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As of June 27, 2020. Source: Apple Mobility Trends.

As of June 30, 2020. P/E stands for price-to-earnings. Sources: Bloomberg, Brookfield PSG.

U.S . DRIVING LE VELS HIT NEW HIGH FOR 2020 U.S. Driving Levels, Indexed to 100

REL ATIVE UTILIT Y VALUATIONS ARE AT A DEC ADE LOW Two-Year Forward P/E Spread vs. S&P 500


O V E R W E I G H T O U T L O O K N E U T R A L O U T L O O K U N D E R W E I G H T O U T L O O K

WEIGHTING SECTOR OBSERVATIONS

Utilities ■ Fundamentals across Utilities remain robust, and we find valuations attractive.

■ The industry is in the midst of a multi-decade capital buildout to upgrade equipment and accommodate a shift toward cleaner sources of electricity generation. Utilities exposed to low-cost renewables generation remains one of our highest-conviction ideas.

Transports ■ Traffic levels for the rest of the year are uncertain due to COVID-19. As a result, we expect some short-term cash flow disruption and are closely watching new case data.

■ Traffic levels may recover over the next 12-36 months, with toll roads seeing a recovery before airports.

Communications ■ We favor U.S. Towers, which have favorable tailwinds given expected multi-year exponential data growth and the rollout of 5th generation (5G) wireless networks.

■ These assets are backed by long-duration cash flows with favorable inflation indexation and minimal associated capex.

Energy Infrastructure

■ We prefer North American companies and believe the short-term outlook is positive.

■ Incremental crude oil demand may improve throughout the remainder of 2020, barring a major COVID-19 resurgence.

O U R C U R R E N T V I E W S

We are starting to see signs of a recovery as economies begin to reopen. The asset class has experienced some price appreciation, particularly among the hardest-hit sectors from COVID-19. The long-term fundamentals for our most of the asset class are unchanged, in our view. People will still need water and electricity; additional infrastructure investment will still be needed to improve productivity and facilitate economic growth, globally. Risk-adjusted returns are not as discounted as in the March lows, but we continue to find new opportunities to deploy capital.


1 THE IMPACT OF COVID-19 ON THE RISK/REWARD PROPOSITION

We are focused on portfolio construction, but that focus has taken on a new intensity during these unprecedented times. To the extent new COVID-19 cases have a significant impact on the reopening of the economy, our preference would skew toward the more defensive names within our universe. As we’ve seen, the dynamics can rapidly evolve, and we are cognizant of the need to tactically shift allocations in a timely manner.

2 INVESTOR ADOPTION OF ESG PRINCIPLES

The importance of the ESG thematic in investing has taken on increased significance in 2020, and we expect this trend to become even more relevant moving forward. ESG fundamentals are key factors in our investment process, and we will look to capitalize on this increased adoption throughout our portfolio construction process.

3 ‘UNDERAPPRECIATED’ OPPORTUNITIES

The sharp recovery contributed to meaningful leaders, but also meaningful laggards, among our universe. We will be focusing our due diligence around these discounted names to ascertain fundamental risk/reward, and we will look to take advantage as opportunities present themselves.

G L O B A L R E N E W A B L E S A N D S U S T A I N A B L E I N F R A S T R U C T U R E Renewables and Sustainable Infrastructure is a key investment theme. Many of these companies were a bright spot from a relative-performance perspective throughout the first half of the year. Earnings were largely stable, and the increasing importance of ESG has been a tailwind for performance. Looking ahead, we acknowledge there are many unknowns, and discussed below are a few items we are closely monitoring for the rest of the year.

O N W A T C H


The sector made a record rally during the second quarter. The Alerian MLP Index (“AMZ”) returned 50.18% and the Alerian Midstream Energy Index (“AMNA”) returned 32.68%—the best quarters ever for both indices—a sharp and swift reversal from the first quarter, when double-black-swan events sent the two energy infrastructure indices to their worst quarters ever.

The second quarter was eventful, bringing negative crude oil prices, the new OPEC+ production agreement—the largest coordinated production cut in history—and swift actions by midstream companies in preparation for what could be a sustained, lower-for-longer commodity price environment. The quarter brought several surprises, and as the second half of 2020 kicks off, we are closely monitoring key data and trends in hopes of finding more clarity in a largely uncertain outlook for global energy. Below, we discuss this quarter’s surprises and what we are watching closely for the remainder of the year.

Energy Infrastructure Equities

R E F L E C T I O N S O N A H I S T O R I C Q U A R T E R

1 SHARP REVERSAL IN THE CRUDE MARKETS ■ Spot WTI crude oil prices started the

quarter at $20.48, plunged to negative -$36.98 on April 20, then rallied by over 200% to finish the quarter at $39.27.

■ Obviously, the coordinated production cut by OPEC, Russia and other producers contributed significantly to the rapid reversal, but the very quick ascent of the 2020 futures curve from prices in the teens to a $35-$40 range was largely inconceivable early in the second quarter.i

2 SHUT-IN REVERSALS; MINIMAL STORAGE ISSUES ■ Due to the rapid rise in crude prices,

we have seen reversals of shut-in crude oil wells materialize seemingly as fast as the initial curtailments.

■ Which wells return is highly dependent on producer cost structures and geography, with regions closer to demand centers (e.g., the Permian) generally seeing volumes return faster than those further away (e.g., the Bakken).

■ Although we were skeptical large- scale storage issues would materialize, believing price would force shut-ins before storage approached tank tops, we did think localized problems could occur. However, even smaller-scale issues failed to occur in significant quantities.

3 PREEMPTIVE ACTIONS OF SOME MIDSTREAM COMPANIES ■ The sector responded relatively

quickly to the changing macro landscape, slashing 2020 capital expenditure and, in some cases, distribution or dividends.

■ Some companies made these payout decisions preemptively, rather than out of necessity, to allow for maximum flexibility and liquidity, and to protect balance sheets or investment-grade credit ratings.

■ By our count, approximately 20 companies in our universe elected to reduce distributions or dividends by the end of June.

O N W A T C H

1 HYDROCARBON DEMAND AS LOCKDOWNS EASE ■ A recovery of U.S. refined product

demand is of paramount importance to the long-term health of the entire U.S. energy sector.

■ As quarantines lift and economies reopen, we will be closely monitoring the numbers of COVID-19 cases and any resulting movement in major demand indicators (refinery utilization, storage levels, days of supply, etc.).

■ The level of May’s demand recovery was encouraging: U.S. gasoline demand was up approximately 50% from the COVID-19-related trough, but we recognize it may take time for demand to normalize fully.ii

2 OPEC+ PRODUCTION OUTLOOK■ The crude oil supply/demand

balance has tightened, given massive global supply cuts, well shut-ins, and natural declines combined with a demand uptick.

■ The current backdrop could quickly deteriorate if previously curtailed production starts to make it back to the physical market sooner than expected.

■ Compliance among all members of OPEC+ will play a major role in keeping the current market outlook intact, although we believe a near-normal demand environment is key for the crude markets to equilibrate.

3 THE OUTCOME OF THE U.S. ELECTION■ What can knock a U.S. presidential

election off the front page? A global pandemic. Nevertheless, we are in an election year, and we will be closely watching possible outcomes and potential shifts in policy.

■ The potential for changes to the tax code could impact sentiment around Master Limited Partnerships (MLPs).

■ The outcome of the U.S. presidential election could also impact existing and future pipeline projects and production on federal lands, among other things we are monitoring closely.


Global Real Estate Securities

Global real estate securities rose 10.33% in the second quarter, as measured by the FTSE EPRA Nareit Developed Index. Along with the broader equity market, the asset class experienced a rotation into value stocks from growth, and then that shift largely reversed toward the end of the three-month period.

The sectors initially hit hardest by the COVID-19 pandemic (hotels, retail and healthcare) staged a meaningful rally early in the quarter on optimism about a return to normalcy, as some economies began to reopen. But with the June uptick in COVID-19 cases (particularly in many U.S. Sunbelt markets), most of these property types gave back gains as the quarter came to a close.

O N W A T C H

COVID-19 has undoubtedly changed the way real estate will be used in the future. We believe opportunities have been created for an active and flexible approach to global real estate. Below we outline signposts key to our second-half outlook and discuss our sector views.

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THE PACE OF REOPENINGS We are keeping a close eye on the pace of reopenings of economies around the globe. Every property type will be just as uniquely impacted when economies reopen as they were when the pandemic and shutdowns began.

VALUATIONS AND SUPPLY TRENDS The Industrial and Data Centers subsectors benefited from a demand perspective in the immediate aftermath of the pandemic. Fundamental tailwinds are likely to persist, but we’re closely watching valuations, as well as supply trends, in these sectors. Both private and public capital has flowed accordingly in response to demand.

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As of June 30, 2020. Source: Bloomberg.

S O C I A L D I S TA N C I N G S E N S I T I V I T Y V A R I E S A C R O S S P R O P E R T Y S U B S E C T O R S Subsector Sensitivities to Disruption from Social Distancing

D ATA C E N T E R S A N D I N D U S T R I A L S E C T O R S H A V E O U T P E R F O R M E D O T H E R P R O P E R T Y T Y P E S Year-to-date returns by property type

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O V E R W E I G H T N E U T R A L U N D E R W E I G H T

WEIGHTINGGEOGRAPHY/SECTOR OBSERVATIONS

N O R T H A M E R I C A

Data Centers and Industrial

■ Data Centers and Industrial may continue to experience positive secular tailwinds.

Healthcare ■ COVID-19 created numerous near-term headwinds for the Healthcare sector. However, positive long-term fundamentals remain in place amid an aging population and longer life expectancies.

Retail ■ The massive rally in global retail stocks during the second quarter caught us by surprise. In general, we feel the run-up was a bit premature, given all the difficulties. We maintain our view that downside risk remains in the near term.

A S I A PA C I F I C

Singapore ■ Valuations among Singapore developers appear attractive relative to history. Additionally, Singapore could stand to benefit from the ongoing uncertainty in Hong Kong.

Japan ■ We are less optimistic on the growth prospects in Japan, with a preference for REITs over developers.

E U R O P E

U.K./Europe ■ Our outlook for the U.K. and Europe is largely unchanged, but we have added exposure selectively where we have seen values emerge.


3REMOTE-WORK AND THE OFFICE Working remotely quickly became the norm (where possible) amid the COVID-19 pandemic. While longer-term implications for the office sector are unknown, rent collection has not been a major issue to date. That said, many key markets that have experienced very rapid rent growth over the past few years are seeing increased sublet space and vacancy rates moving higher. This is likely to soften rents in these markets, and we are keeping a close eye on related data to see how the trend plays out.

The work-from-home phenomenon could also impact regional employment markets and the residential sector. With the potential for more flexible work environments (see the chart to the right), we could see changes in migration and employment patterns, with people starting to move toward lower-cost locations. We will be watching for such patterns.

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As of March 30, 2020. Source: A Gartner, Inc. survey of 317 CFOs and Finance leaders.

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Real asset corporate credit rallied in the second quarter, with the ICE BofA Real Asset USD Corporate and High Yield Custom Index gaining 12.22% in the period. After a strong run in April and May, returns moderated in June, as new COVID-19 cases accelerated in parts of the U.S.

O N W A T C H

The current environment is a curious juxtaposition. On one hand there is a tremendous amount of uncertainty related to a multitude of issues: COVID-19, trade concerns, energy markets, not to mention the upcoming U.S. presidential election. On the other hand, the U.S. Federal Reserve’s backstop has been providing a wall of liquidity to support credit markets. According to J.P. Morgan data, new-issue high-yield volume set a record in June 2020, surpassing the previous monthly record (set in September 2013) by more than 10%. Looking forward, we are watching a few key data points to help inform our views for the second half.

Real Asset Debt

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THE POTENTIAL FOR SPREADS TO MOVE HIGHER We noted last quarter that the speed at which credit spreads widened across the board (both investment grade and high yield) was swift and severe. The exact opposite can be said for the second quarter; and we did not anticipate spreads would compress so rapidly. The chart to the right shows how quickly spreads widened and subsequently collapsed.

In fact, in many cases, corporate debt yields were lower at the end of the second quarter than they were prior to the pandemic. Despite the rebound in the second quarter, we do not believe we’ve seen the end of market volatility, given the number of risks to economies and markets.

FED-DRIVEN LIQUIDITYWe all know the saying “Don’t fight the Fed,” but these are unchartered waters. There is a distinct possibility that the central bank’s attempt to flood the system with liquidity could have unforeseen consequences down the road. We are particularly watching for signs that risk taking and valuations have become excessive.

As of June 30, 2020. Source: Bloomberg.

As of June 28, 2020. Sources: Federal Reserve, The Wall Street Journal.

K E Y ME A SUR ES OF THE FED ’ S AT TEMP T TO BOOS T L IQUIDIT Y

$250 Billion: Amount of already-issued corporate debt the Fed plans to purchase

$500 Billion: Amount of newly issued corporate debt the Fed plans to eventually purchase

$8.7 Billion: Amount of corporate debt the Fed had accumulated through June 24, 2020

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Amid these dynamics, our view is to defensively position our portfolios predominantly in the highest- quality companies. That said, we are seeing attractive opportunities emerge, particularly where credit downgrades have resulted in discounted valuations. Below we provide our specific views across sectors.

O V E R W E I G H T N E U T R A L U N D E R W E I G H T

WEIGHTING SECTOR OBSERVATIONS

I N F R A S T R U C T U R E

Utilities ■ We continue to prefer integrated electric utilities, given the relative stability of their cash flows.

Telecom ■ We also favor communication towers and data center operators. We see the tailwinds from COVID-19 continuing.

R E A L E S TAT E

Residential ■ We advocated slightly reducing real estate exposure to fund more opportunistic investments within the energy sector. We favor residential exposure that is a mix of homebuilders, single-family rentals and select multifamily companies.

N AT U R A L R E S O U R C E S

Exploration & Production

■ We have turned more positive toward integrated energy and exploration & production companies, as attractive risk-adjusted opportunities have emerged, particularly around companies that have been downgraded.



Indexes are as follows: Global Equities reflects the MSCI World Index. Global Infrastructure Equities reflects the FTSE Global Core Infrastructure 50/50 Index. Global Real Estate Equities reflects the FTSE EPRA Nareit Developed Index. Energy Infrastructure reflects the Alerian Midstream Energy Index. Global Investment Grade reflects the ICE BofA Merrill Lynch Global Corporate Index. REIT Preferreds reflects the ICE BofA Merrill Lynch Preferred Stock REITs 7% Constrained Index. Global High Yield reflects the ICE BofA Merrill Lynch Global High Yield Index. Real Asset Debt reflects the ICE BofA Merrill Lynch Real Asset Corporate & High Yield Custom Index. See disclosures for index definitions.

D I S C L O S U R E SBrookfield Public Securities Group LLC is an SEC registered investment adviser and registered as portfolio manager in each of the provinces and territories of Canada and represents the Public Securities Group of Brookfield Asset Management, Inc., providing global listed real assets strategies including real estate equities, infrastructure equities, multi-strategy real asset solutions and real asset debt. PSG manages separate accounts, registered funds and opportunistic strategies for institutional and individual clients, including financial institutions, public and private pension plans, insurance companies, endowments and foundations, sovereign wealth funds and high-net-worth investors. PSG is an indirect, wholly-owned subsidiary of Brookfield Asset Management, Inc., a leading global alternative asset manager.

The information in this publication is not and is not intended as investment advice, an indication of trading intent or holdings, or prediction of investment performance. Views and information expressed herein are subject to change at any time. Brookfield disclaims any responsibility to update such views and/or information. This information is deemed to be from reliable sources; however, Brookfield does not warrant its completeness or accuracy. This publication is not intended to and does not constitute an offer or solicitation to sell or a solicitation of an offer to buy any security, product or service (nor shall any security, product or service be offered or sold) in any jurisdiction in which Brookfield is not licensed to conduct business and/or an offer, solicitation, purchase or sale would be unavailable or unlawful. Opinions expressed herein are current opinions of Brookfield Public Securities Group LLC, including its subsidiaries and affiliates, and are subject to change without notice. Brookfield Public Securities Group LLC, including its subsidiaries and affiliates, assumes no responsibility to update such information or to notify clients of any changes. Any outlooks, forecasts or portfolio weightings presented herein are as of the date appearing on this material only and are also subject to change without notice. Past performance is not indicative of future performance and the value of investments and the income derived from those investments can fluctuate. Future returns are not guaranteed and a loss of principal may occur. Investing in MLPs involves material income tax risks and certain other risks. Actual results, performance or events may be affected by, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) changes in laws and regulations and (5) changes in the policies of governments and/or regulatory authorities.

F O R W A R D - L O O K I N G S T A T E M E N T SInformation herein contains, includes or is based upon forward-looking statements within the meaning of the federal securities laws, specifically Section 21E of the Securities Exchange Act of 1934, as amended, and Canadian securities laws. Forward-looking statements include all statements, other than statements of historical fact, that address future activities, events or developments, including, without limitation, business or investment strategy or measures to implement strategy, competitive strengths, goals, expansion and growth of our business, plans, prospects and references to our future success. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other similar words are intended to identify these forward-looking statements. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results or outcomes. Consequently, no forward-looking statement can be guaranteed. Our actual results or outcomes may vary materially. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

I N D E X P R O V I D E R D I S C L A I M E R The quoted indexes within this publication are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. There may be material factors relevant to any such comparison, such as differences in volatility and regulatory and legal restrictions between the indexes shown and any investment in a Brookfield strategy, composite or fund. Brookfield obtained all index data from third-party index sponsors and believes the data to be accurate; however, Brookfield makes no representation regarding its accuracy. Indexes are unmanaged and cannot be purchased directly by investors. There may be material factors relevant to any such comparison, such as differences in volatility and regulatory and legal restrictions between the indexes shown and a Brookfield strategy, composite or mutual fund.

Brookfield Public Securities Group LLC does not own or participate in the construction or day-to-day management of the indexes referenced in this document. The index information provided is for your information only and does not imply or predict that a Brookfield Public Securities Group LLC product will achieve similar results. This information is subject to change without notice. The indexes referenced in this document do not reflect any fees, expenses, sales charges or taxes. It is not possible to invest directly in an index. The index sponsors permit use of their indexes and related data on an "as is" basis, make no warranties regarding same, do not guarantee the suitability, quality, accuracy, timeliness and/ or completeness of their index or any data included in, related to or derived therefrom, and assume no liability in connection with the use of the foregoing. The index sponsors have no liability for any direct, indirect, special, incidental, punitive, consequential or other damages (including loss of profits). The index sponsors do not sponsor, endorse or recommend Brookfield Public Securities Group LLC or any of its products or services. Unless otherwise noted, all indexes are Total Return indexes.

I N D E X D E F I N I T I O N SThe Alerian Midstream Energy Index is a broad-based composite of North American energy infrastructure companies. The capped, float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMNA) and on a total-return basis (AMNAX).

The Alerian MLP Index is the leading gauge of energy infrastructure Master Limited Partnerships (MLPs). The capped, float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX).

The Bloomberg Barclays Global Aggregate Index tracks the performance of investment-grade public debt issued in the major domestic and eurobond markets, including global bonds.

The Dow Jones Brookfield Global Infrastructure Composite Index comprises infrastructure companies with at least 70% of its annual cash flows derived from owning and operating infrastructure assets, including Master Limited Partnerships (“MLPs”). Brookfield has no direct role in the day-to-day management of any Brookfield-branded indexes.

The FTSE Global Core Infrastructure 50/50 Index gives participants an industry-defined interpretation of infrastructure and adjusts the exposure to certain infrastructure subsectors. The constituent weights are adjusted as part of the semi-annual review according to three broad industry sectors - 50% Utilities; 30% Transportation, including capping of 7.5% for railroads/railways; and a 20% mix of other sectors including pipelines, satellites and telecommunication towers. Company weights within each group are adjusted in proportion to their investable market capitalization.

The FTSE EPRA Nareit Developed Real Estate Index is an unmanaged market-capitalization-weighted total-return index which consists of publicly traded equity REITs and listed property companies from developed markets.

The ICE BofA Global Corporate Index is an unmanaged, commonly accepted measure of the performance of global investment-grade corporate securities. Index returns are calculated monthly, and the calculations assume reinvestment of dividends. The index does not reflect any fees, expenses or sales charges. It is not possible to invest directly in an index.


The ICE BofA Global High Yield Index is an unmanaged, commonly accepted measure of the performance of global highyield corporate securities. Index returns are calculated monthly, and the calculations assume reinvestment of dividends. The index does not reflect any fees, expenses or sales charges. It is not possible to invest directly in an index.

The ICE BofA Preferred Stock REITs 7% Constrained Index is a subset of the BofA Fixed-Rate Preferred Securities Index including all real estate investment trust-issued preferred securities. The ICE BofA Fixed-Rate Preferred Securities Index tracks the performance of fixed-rate U.S. dollar-denominated preferred securities issued in the U.S. domestic market.

ICE BofA Real Asset USD High Yield Custom Index is a custom index that tracks the performance of sectors of the ICE BofA Global High Yield Index that correspond to equity sectors in Brookfield's real asset universe. Such real-asset-related sectors include Cable, Infrastructure Services, Oil & Gas T&D, Telecommunications, Transportation, Utilities, Agriculture, Timber, Basic Materials, Energy Exploration & Production, Metals & Mining, Real Estate, RE Ownership & Development and REITs.

ICE BofA Real Asset USD High Yield and Corporate Custom Index is a custom index blend of sectors of ICE BofA Global High Yield Index (70%) and ICE BofA Global Corporate Index (30%) that correspond to equity sectors in Brookfield's real asset universe. Such real-asset-related sectors include Cable, Infrastructure Services, Oil & Gas T&D, Telecommunications, Transportation, Utilities, Agriculture, Timber, Basic Materials, Energy Exploration & Production, Metals & Mining, Real Estate, RE Ownership & Development and REITs.

The MSCI U.S. REIT Index is a free-float market-capitalization-weighted index that is composed of equity REIT securities that belong to the MSCI U.S. Investible Market 2500 Index.

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. The S&P 500 Index is an equity index of 500 widely held, large-capitalization U.S. companies.

E N D N O T E Si Source: Bloomberg.ii U.S. Energy Information Administration.

C O N T A C T U Sbrookfield.com | [email protected]© 2020 Brookfield Public Securities Group LLC


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Real Assets Quarterly/media/Files/B...REAL ASSETS ALLOCATION As discussed above, our base case is an expectation that real assets, along with broader markets, grind higher from here