Real estate

Commercial & multifamily mortgage loan (CML) investments

August 31, 2023 | 8 min read

Dan Dickman

Managing Director, Portfolio Management

In a volatile economic environment, core commercial and multifamily mortgage loan investments may provide investors with an attractive credit risk profile, appealing relative value, and diversification within a larger fixed income portfolio.

Moreover, these investments may offer high current income returns, limited correlation of returns with other fixed income alternatives, call protection, and the ability for investors to tailor their portfolios to meet specific durational needs.

It is essential for investors to select a well-qualified asset manager to help them reap the potential benefits of investing in commercial and multifamily mortgages, since the asset class can be difficult to navigate.

Potential key benefits of allocating to commercial and multifamily mortgage loan investments:

Attractive credit risk profile
Appealing relative value
Appealing current income returns
Call protection
Limited correlation of returns with fixed income alternatives

The asset class

Core commercial and multifamily mortgage loan (“CML”) investments include private mortgage loans secured by first liens on well-leased, income- producing properties such as industrial, retail, office, and multifamily residential properties. Investment sizes range from less than $10 million to more than $100 million per transaction, with terms ranging from less than three years to 30 years or longer. Value- added investments in subordinate debt and bridge loans secured by commercial and multifamily real estate are also available, although here we will focus primarily on core, senior investments. According to the U.S. Federal Reserve (Fed), the total balance of commercial and multifamily real estate debt outstanding in the United States was approximately $5.67 trillion at the end of first quarter 2023¹. CML investors include commercial banks, asset-backed security issuers, insurance companies, government- sponsored enterprises, finance companies, pension funds and others.

Credit risk

Underwriting metrics for newly originated CML investments remain robust from an historical perspective, buoyed by changes to insurance company risk-based capital (RBC) charge requirements adopted by the National Association of Insurance Commissioners (NAIC) in 2013. Banks also progressively tightened lending standards for stabilized commercial and multifamily residential properties each quarter from late 2018 through early 2021 before leveling their underwriting expectations, which remain tight overall.²

The current RBC rubric from the NAIC mandates different minimum levels of capital for loans with different loan- to-value ("LTV") and debt service coverage ratios (DSCR), creating a meaningful economic incentive for insurance company lenders to take a conservative approach toward underwriting. As a result, average credit metrics for core CMLs have been more conservative over the past 10 years. (See Exhibit 1).

Of course, even with the pre-2013 underwriting metrics insurance companies enjoyed strong credit performance in their CML portfolios, with industry delinquency rates averaging just 1.6% and an average loss upon foreclosure of approximately 20.2% prior to 2013 (and better since that time, as older loans repaid).³ The result has been minimal loss rates for core CML portfolios.

EXHIBIT 1: Insurance company fixed rate CMLs

	Pre-2013	Post-2013
Average LTV	69.6%	59.0%
Average DSCR	1.46	2.10

Source: The American Council of Life Insurers’ quarterly Commercial Mortgage Commitments reports through Q2 2023.

Regarding default risk, we believe robust debt service coverage ratios underwritten for core CMLs today allow significant declines in net operating incomes before property income streams can no longer cover debt service payments and operating expenses.
With regards to the potential severity of core CML losses, we believe today’s low loan-to-value ratios allow significant declines in property values before losses would be realized on defaulted loans.
Core CML underwriting margins remain strong.

CASE STUDY: Gauging historical portfolio performance

To supplement the analysis of historical credit loss data from the ACLI, we studied the performance of 33 commercial mortgage loan portfolios that Principal Real Estate created and managed. The data set included CMLs originated for each of our non-affiliated core CML clients. However, the study excluded Principal Life Insurance Company data so that the results might better reflect a broad range of strategies employed for various clients. Consisting of loans originated between 1988 and 2022, the data set included 1,425 loans with an original principal balance of $11.24 billion. At year-end 2022, loans with an aggregate balance of $4.63 billion remained outstanding.

The key findings of the study included:

Of the 1,425 loans studied, 25 experienced losses. This equated to 1.75% of all loans originated by loan count.

For the 25 loans that incurred losses, cumulative losses totaled $41.73 million. That resulted in an average loss severity of 26% for loans experiencing losses.

Based on an approximate outstanding term of six years and weighted by loan amount, the average annual portfolio loss rate was 0.062%, or roughly 6 basis points per year.

Case Study is shown for example and illustrate purposes only and is not a prediction of future results.

Relative value

From a relative value perspective, CML spreads have historically provided excess returns compared to similarly rated corporate bonds.⁴ To showcase this difference, we examined the differential between Principal Real Estate's market-clearing spread estimates for core CMLs and Bloomberg Barclay’s corporate bond spread indices. When considering 5- and 10-year terms and a range of credit ratings between AAA and BBB+, on average core CMLs offered approximately 68 basis points (bps) of excess returns relative to comparably rated corporate bonds since the beginning of the year 2000. The spread differential offsets the higher administrative costs and lower liquidity of mortgages compared to corporate bonds, and we believe the differentials make core CML investments attractive from a risk-return perspective.

EXHIBIT 2: Relative value at market-clearing: CML spread premiums observed since 2000 CML market-clearing spread estimates less Corporate Bond Composite Index
5 & 10-Year terms, BBB+ equivalent & better, classes & times weighted equally, annual effective yield basis

Source: Barclay’s, Aladdin, Principal Real Estate, July 2023.

Returns

Over the past 44 years CMLs delivered total returns approaching those of real estate equity and exceeded those of corporate bonds.⁵ An analysis of the same data set revealed that CMLs provided a consistently high level of current returns over time, which is an attribute of the asset class particularly appealing to investors with significant current liabilities.

EXHIBIT 3: Average annual returns - Total return vs. income return
Q4 1978 through Q2 2023

Source: Bloomberg, S&P, NCREIF, and Giliberto-Levy, Q2 2023. The S&P 500 index represents U.S. equities. The NCREIF National Property Index represents performance of commercial real estate. The Giliberto-Levy Commercial Mortgage Performance Index represents U.S. core commercial real estate loans. The Bloomberg US Corporate Bond Index represents the investment grade U.S. corporate bond market. Please see index descriptions on page 6. Indices are unmanaged and do not take into account fees, expenses, and transaction costs and it is not possible to invest in an index.

Other considerations

Commercial mortgages provide correlation benefits with other asset classes used by institutional investors. The price appreciation of various fixed income asset classes is driven largely by interest rate levels. To gauge the excess value provided by commercial mortgage investments over bond investments, the primary focus should be on spread differentials and credit loss expectations. However, it is interesting to note that the total returns of these fixed income asset classes are not perfectly correlated (only a 0.80 correlation since the fourth quarter of 1978). Therefore, institutional investors who use core CML investments as a component of their fixed income portfolios may reap the benefits of portfolio diversification.

EXHIBIT 4: Correlation of quarterly total returns—Giliberto-Levy Commercial Mortgage Performance Index vs. other indices
Q4 1978 through Q2 2023

Source: Bloomberg, S&P, NCREIF, and Giliberto-Levy, Q2 2023. The Bloomberg US Corporate Bond Index represents the investment grade U.S. corporate bond market. The S&P 500 index represents U.S. equities. The NCREIF National Property Index represents performance of commercial real estate. Please see index descriptions in the disclosure section.

Most commercial and multifamily mortgage investments feature a high degree of call protection, which reduces risk to the investor for a specific amount of time during which the borrower cannot prepay any and/or all of the principal. In the event a borrower prepays a fixed rate loan prior to the final three months of the loan term, most loans require that the borrower pay a yield maintenance prepayment premium (a so-called “make-whole”) to the lender. However, in certain instances, lenders will negotiate more flexible prepayment provisions at the time of loan origination, in exchange for a higher interest rate.

Because of the private nature of the commercial mortgage market, lenders can tailor loan terms to meet their portfolio’s average life and duration needs. Lenders may also specify investment criteria that are suited to their particular credit risk tolerance and yield requirements. For example, many life insurance companies select core senior mortgage programs as foundations to their real estate debt portfolios. Those investors who can tolerate slightly higher risk- return profiles may also consider construction lending, subordinate debt, or bridge lending strategies.

Conclusion

Commercial real estate debt appeals to many investors in today’s market environment as a potential means of enhancing yields and mitigating portfolio level risks associated with their fixed income portfolios. However, the private market nature of core commercial mortgage investments creates both challenges and opportunities for investors. Investors who take affirmative steps to overcome the challenges have the potential for a mix of strong relative value, minimal credit losses, appealing current income returns, and diversification benefits from their commercial mortgage investments. The management-intensive nature of the asset class requires specialized knowledge, expertise, and relationships with the right borrowers and intermediaries. While these may serve as material barriers to market entry, investors can select an investment advisor with the right people, tools, and relationships to help them meet their investment goals.

¹ “Financial Accounts of the United States: Flow of Funds, Balance Sheets, and integrated Macroeconomic Accounts, First Quarter 2023,” Board of Governors of the Federal Reserve System.

² “Senior Loan Officer Opinion Survey on Bank Lending Practices”, April 2023, Board of Governors of the Federal Reserve System.

³ “Mortgage Loan Portfolio Proﬁle”, various editions, American Council of Life Insurers.

⁴ “Using Principal Real Estate’s proprietary credit risk rating system, a 60% LTV loan for a property with a highly durable cash ﬂow stream and favorable property, market, and sponsor attributes might be rated A+/A. A 68% LTV loan for the same property might be rated BBB+. For illustration purpose only, not to be taken as investment advice. Proprietary model output is based upon certain assumptions that may change, are not guaranteed and should not be relied upon as a signiﬁcant basis for an investment decision.

⁵ Based on data from Standard & Poor’s, Bloomberg Barclay’s, the National Council of Real Estate Investment Fiduciaries, Giliberto-Levy, and Principal Real Estate Research. For illustration purpose only, not to be taken as investment advice. It is not possible to invest in an index. Past performance does not guarantee future returns.

Disclosure

These are the current views and opinions of Principal Real Estate and are not intended to be, nor should they be relied upon in any way as a forecast or guarantee of future events regarding particular investments or the markets in general.

Risk Considerations
Investing involves risk, including possible loss of Principal. Past Performance does not guarantee future return. Asset allocation and diversification do not ensure a profit or protect against a loss. Fixed-income investment options that invest in mortgage securities, such as commercial mortgage-backed loans and securities, are subject to increased risk due to real estate exposure. Real estate investment options such as commercial mortgage loans are subject to risks inherent to owning and investing in real estate including value fluctuations, capital market pricing volatility, liquidity risks, leverage, credit risk, adverse general and local economic conditions, and decreases in real estate values and occupancy rates.

Important information
This material covers general information only and does not take account of any investor’s investment objectives or financial situation and should not be construed as specific investment advice, a recommendation, or be relied on in any way as a guarantee, promise, forecast or prediction of future events regarding an investment or the markets in general. The opinions and predictions expressed are subject to change without prior notice. The information presented has been derived from sources believed to be accurate; however, we do not independently verify or guarantee its accuracy or validity. Any reference to a specific investment or security does not constitute a recommendation to buy, sell, or hold such investment or security, nor an indication that the investment manager or its aliates has recommended a specific security for any client account.

Subject to any contrary provisions of applicable law, the investment manager and its aliates, and their ocers, directors, employees, agents, disclaim any express or implied warranty of reliability or accuracy and any responsibility arising in any way (including by reason of negligence) for errors or omissions in the information or data provided. All figures shown in this document are in U.S. dollars unless otherwise noted.

This material may contain ‘forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.

Index descriptions:
Bloomberg U.S. Corporate Bond Index measures the performance of the long-dated, investment grade U.S. corporate bond market. Only bonds that have a maturity of more than ten years are included. The S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on exchanges in the United States. The NCREIF Property Index (NPI) is the primary index used by institutional investors in the United States to analyze the performance of commercial real estate and use as a benchmark for actively managed real estate portfolios. The Giliberto-Levy Commercial Mortgage Performance Index tracks the income and price performance of U.S. core commercial real estate loans.

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MM13018-01 | 08/2023 | 3047267-122024

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The information on this website has been developed internally and/or obtained from sources believed to be reliable; however Principal Global Investors and its affiliates do not independently verify or guarantee its accuracy or validity. The information and services provided on this website are provided ""AS IS"" and without warranties of any kind, either expressed or implied. To the fullest extent permissible pursuant to applicable law, Principal Global Investors disclaims all warranties, including, but not limited to, any warranty of non-infringement of third-party rights and any implied warranties of merchantability and fitness for a particular purpose. Principal Global Investors does not warrant, either expressly or impliedly, the accuracy or completeness of the information, text, graphics, links or other items contained on this website and does not warrant that the functions contained in this website will be uninterrupted or error-free, that defects will be corrected, or that the website will be free of viruses or other harmful components. Principal Global Investors expressly disclaims all liability for errors and omissions in the materials on this website and for the use or interpretation by others of information contained on the website. Subject to any contrary provisions of applicable law, no company in the Principal Financial Group nor any of their employees or directors gives any warranty of reliability or accuracy nor accepts any responsibility arising in any other way (including by reason of negligence) for errors or omissions on this website.

If you have questions, please email us.

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"These Terms & Conditions explain certain legal and regulatory conditions and restrictions in relation to the Principal Global Investors (Europe) Limited website, and in relation to the Principal Global Investors Funds (‘the Funds’). This information may be changed by Principal Global Investors at any time without notice.

In these terms and conditions, references to 'Principal Global Investors' means Principal Global Investors (Europe) Limited or any affiliate of the Principal Financial Group, Inc. or Principal Global Investors, LLC.

Before you proceed, you must acknowledge that you have read, and agree to, our terms and conditions.

Information in relation to the Principal Global Investors Funds is available through this web site to institutional investors resident in the following countries of: Belgium, France, Finland, Germany, Guernsey, Ireland, Italy, Jersey, Netherlands, Spain, Sweden, Switzerland and the United Kingdom. By proceeding this far you are representing and warranting that you are an institutional investor resident in one of these countries. Not all of the Funds are available in all these jurisdictions, and investors are directed to the Country Registration document for detailed information . What follows is not an offer or invitation to acquire an investment to, and should therefore not be relied upon by, any person anywhere other than the countries noted. Persons in respect of whom such prohibitions apply must not access this web site. This web site is reserved exclusively for non-U.S. persons and should not be accessed by any person in the United States.

Yes, I certify to be an institutional investor and resident of a country listed above.

Cookies
Use of cookies on this site is outlined in the Privacy and Security Policy. In accepting these terms and conditions, you accept the terms of the Cookie Policy and the use of cookies from this site.

Legal Entity Disclosure and Regulation
In Europe by Principal Global Investors (EU) Limited, Sobo Works, Windmill Lane, Dublin D02 K156, Ireland. Principal Global Investors (EU) Limited is regulated by the Central Bank of Ireland.

In the United Kingdom by Principal Global Investors (Europe) Limited, Level 1, 1 Wood Street, London, EC2V 7 JB, registered in England, No. 03819986, which is authorised and regulated by the Financial Conduct Authority (“FCA”).

In Switzerland by Principal Global Investors (Switzerland) GmbH. This website is considered as advertising and information contained herewith be treated as such. Investors can obtain free of charge the prospectus, trust deed, the prospectus, the key investor information document (KIID), and the annual and semi-annual reports from the representative in Switzerland.

In Europe and United Kingdom, this website is directed exclusively at Professional Clients and Eligible Counterparties and should not be relied upon by Retail Clients (all as defined by the MiFID and FCA respectively). If you are viewing the material as a retail investor, you should seek independent investment advice before deciding whether the products and services in question are suitable to meet your investment needs and objectives, as the language has not been complied to a retail client standard.

Principal Global Investors Funds
Principal Global Investors (Ireland) Limited is the issuer of the Funds. Investments may only be made on an application form attached to a current prospectus and following receipt by the investor of the KIID in respect of the Fund in which they intend to invest. The latest version of the prospectus of the Funds is dated 14 December 2012.

For Real estate investors in the European Economic Area (“EEA”), this website and the information on it is only directed at persons who are professional investors for the purposes of the Alternative Investment Fund Managers Directive (2011/61/EU) (“AIFMD”), professional clients or eligible counterparties for the purposes of the Markets in Financial Instruments Directive (Directive 2014/65/EU) (“MiFID II”) or as otherwise defined under applicable local law and regulation and at whom this website and the information on it may lawfully be directed in any relevant jurisdiction (“Eligible Persons”). In relation to each member state of the EEA (“Member State”) which has implemented AIFMD (and for which transitional arrangements are not/ no longer available), this website may only be accessed and interests in Funds may only be offered or placed in a Member State to the extent that: (i) the relevant Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD (as implemented into the local law/regulation of the relevant Member State); or (ii) this website and its information may otherwise be lawfully distributed and the interests in Funds may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). In relation to each Member State of the EEA which, at the date of accessing this website, has not implemented AIFMD, this information may only be distributed and interests in Funds may only be offered or placed to the extent that this information may be lawfully distributed and the interests in Funds may lawfully be offered or placed in that Member State (including at the initiative of the investor).

Persons who are not Eligible Persons, including but not limited to those individuals or other persons who fall within the FCA’s definition of ‘retail clients’, should not use or rely upon this website or the information contained therein and may not engage the services of Principal Real Estate or any of its affiliates, or invest in any Fund. Potential investors are advised that all or most of the protections provided by the UK regulatory system will not apply and that the UK Financial Services Compensation Scheme may not be available in relation to an investment in a Fund or separate account.

The contents of this website have not been verified or approved by any competent regulatory or supervisory authority. No liability, whether in negligence or otherwise, arising directly or indirectly from the use of the information or any part of it on this website is accepted and no representation, warranty or undertaking, whether express or implied, is or will be made at any time by Principal Real Estate or its affiliates or any of their respective advisers, directors, officers, employees, representatives or other agents (“Principal Agents”) for any information or any of the opinions contained herein or for any errors, omissions or misstatements.

None of Principal Real Estate or its affiliates or any Principal Agents makes or has been authorised to make any representation or warranties, whether express or implied, in relation to Principal Real Estate or regarding the truth, accuracy or completeness of any of the information contained on this website at any time. No representation or warranty is given by Principal Real Estate, its affiliates or the Principal Agents as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, estimates or forecasts contained in the information on this website. Furthermore, nothing contained on this website is or should be relied on as a promise or representation as to the future. No reliance may be placed by any person for any purpose whatsoever on the information or opinions contained on this website or on its completeness, accuracy or fairness at any time.

Principal Global Investors (Europe) Limited is not authorised by the FCA to directly deal with retail investors; any distribution of the Fund to retail investors in Europe is facilitated by fund distributors with which Principal Global Investors (Europe) Limited has entered distribution arrangements, pursuant to advice provided to investors by those distributors, based on the documents Principal Global Investors (Europe) Limited provides. Retail investors should not be provided with access to this website.

The name of the Swiss representative is ACOLIN Fund Services AG, Stadelhoferstrasse 18, CH-8001 Zürich. The name of the Swiss paying agent is Banque Cantonale de Genève, 17, quai de l’Ile, 1204 Geneva. Investors can obtain the prospectus, trust deed, the simplified prospectuses and the annual and semi-annual reports free of charge from the representative in Switzerland.
The value of units and the income from them may fall as well as rise.

Investments in the Funds are neither insured nor guaranteed by the US Government or the Federal Deposit Insurance Corporation and are not deposits or obligations of, or guaranteed by, Principal Global Investors.

No Solicitation
Nothing contained in this website shall constitute an offer or solicitation, in relation to units in the Funds or generally, in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or not authorised.

In particular, shares issued by the Company, and units in the Funds, have not been and will not be registered under the United States Securities Act of 1933 as amended or the securities laws of any state or political subdivision of the United States and may not, except in a transaction which does not violate US securities laws, be directly offered or sold in the United States or to any US Person. The Company will not be registered under the United States Investment Company Act of 1940 as amended.

This website is reserved exclusively for non-US persons and should not be accessed by any person in the United States.

No Investment Advice
The information in this website contains general information only on investment matters and should not be considered as a comprehensive statement on any matter and should not be relied upon as such nor should it be construed as specific investment advice, an opinion or recommendation. The general information it contains does not take account of any investor’s investment objectives, particular needs or financial situation, nor should it be relied upon in any way as a forecast or guarantee of future events regarding a particular investment or the markets in general. Past performance is not a reliable indicator of future performance and should not be relied upon as a significant basis for an investment decision.

You should also inform yourself as to (a) the possible tax consequences, (b) the legal requirements and (c) any foreign exchange restrictions or exchange control requirements which you might encounter under the laws of the countries of your citizenship, residence or domicile and which might be relevant to any investment, including the subscription, holding, transfer or disposal of units in the Funds

Delegation of Investment Management to Affiliates

Products upon which composite results contained in this material, if any, are based may not themselves be available in the United Kingdom and certain other jurisdictions; however, the underlying investment management capability can be made available to institutional investors subject to all applicable local regulations and restrictions. In connection with its management of client portfolios, PGIE may delegate management authority to affiliates that are not authorised and regulated by the Financial Conduct Authority. In any such case, the client may not benefit from all protections afforded by rules and regulations enacted under the Financial Services and Markets Act 2000.

Disclaimer
The information on this website is given by Principal Global Investors in good faith and has been derived from sources believed to be reliable and accurate as at their date. However, Principal Global Investors makes no representation or warranty of any kind for the accuracy or completeness of the information and it is under no obligation to update or correct any errors in the information after the date of publication. This website also contains videos where the comments were valid on the date the video was recorded. Markets move continuously and you should only rely on current information for any investment decisions.

Subject to applicable law, Principal Global Investors and its affiliates and their respective directors, employees and associates do not accept any responsibility arising in any way (including by reason of negligence) for errors in, or omissions from, the information and do not accept any liability for any loss or damage, however caused, as a result of any person relying on any information on the website or being unable to access the website.

The Internet is not a totally reliable and secure medium of communication. Principal Global Investors accepts no liability for the security or confidentiality of information transmitted in this way and any such transmission of information shall be at your own risk.

The entire content of this website is subject to copyright with all rights reserved. You may not copy, reproduce, distribute or modify the content of this website without the prior written permission of Principal Global Investors.

No instructions for investment purposes will be accepted directly from this website or by e-mail.

If you accept these terms and conditions, click ""Accept."""

You are about to leave PrincipalAM.com and be directed to our Japanese site, PrincipalGlobal.jp. If you wish to proceed, please click "Accept." If you would like to stay on PrincipalAM.com, please click "I do not accept."

You may view, download for caching purposes only, and print content from the website for your own personal use, subject to the restrictions set out below and elsewhere in these Terms of Use.

No Guarantee of Timeliness
This website may contain videos where the comments were valid on the date the video was recorded. Markets move continuously and you should only rely on current information for any investment decisions. The information and materials contained on this website, and the terms, conditions, and descriptions that appear, are subject to change. All content on this website is presented only as of the date published or indicated, and may be superseded by subsequent market events or for other reasons. In addition, you are responsible for setting the cache settings on your browser to ensure you are receiving the most recent data.

No Warranties
The information on this website has been developed internally and/or obtained from sources believed to be reliable; however Principal Global Investors and its affiliates do not independently verify or guarantee its accuracy or validity. The information and services provided on this website are provided ""AS IS"" and without warranties of any kind, either expressed or implied. To the fullest extent permissible pursuant to applicable law, Principal Global Investors disclaims all warranties, including, but not limited to, any warranty of non-infringement of third-party rights and any implied warranties of merchantability and fitness for a particular purpose. Principal Global Investors does not warrant, either expressly or impliedly, the accuracy or completeness of the information, text, graphics, links or other items contained on this website and does not warrant that the functions contained in this website will be uninterrupted or error-free, that defects will be corrected, or that the website will be free of viruses or other harmful components. Principal Global Investors expressly disclaims all liability for errors and omissions in the materials on this website and for the use or interpretation by others of information contained on the website. Subject to any contrary provisions of applicable law, no company in the Principal Financial Group nor any of their employees or directors gives any warranty of reliability or accuracy nor accepts any responsibility arising in any other way (including by reason of negligence) for errors or omissions on this website.

If you have questions, please email us.

Click ""Accept"" to indicate your acknowledgement and acceptance of Principal Global Investors Terms of Use and to continue."

"Principal Global Investors, LLC, the issuer of this website, is a branch registered in the Dubai International Financial Centre and is authorized by the Dubai Financial Services Authority as a representative office.

This website contains general information only on investment matters and nothing in this website is intended to constitute or form part of any offer or inducement to issue or sell, or any solicitation of any offer to subscribe for or purchase, any securities or investment products in the UAE (including the Dubai International Financial Centre) and accordingly should not be construed as such. Information in this website is not directed at you if we are prohibited by any law of any jurisdiction from making the information on this site available to you and is not intended for any use that would be contrary to local law or regulation. Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be available in all jurisdictions. Accordingly persons are required to inform themselves of and observe any such restrictions.

The information in this website is being made available on the basis that the recipient acknowledges and understands that the entities and securities to which it may relate have not been approved, licensed by or registered with the UAE Central Bank, the Dubai Financial Services Authority or any other relevant licensing authority or governmental agency in the UAE or elsewhere in the Middle East.

The information in the following website should not be construed as investment advice or a recommendation for the purchase or sale of any security. The value of investments and the income from them may fall as well as rise. Principal Global Investors, LLC and the other member firms of Principal Global Investors (collectively, the ""Firms"")* do not guarantee any investment results and there can be no assurance that the strategies employed will improve investment performance, and make no guarantee that a client's investment objectives will be achieved and no warranties or representations, expressed or implied, are made by the Firms concerning the benefits of these strategies discussed herein. The information in this website has been developed internally and/or obtained from sources that the Firms believe to be reliable; however, the Firms do not guarantee the accuracy, adequacy or completeness of such information and are not responsible for any errors or omissions. This website also contains videos where the comments were valid on the date the video was recorded. Markets move continuously and you should only rely on current information for any investment decisions.

This website contains general information only on investment matters and should not be considered as a comprehensive statement on any matter and should not be relied upon as such. The information it contains does not take account of any investor's investment objectives, particular needs or financial situation. Past performance is not a reliable indicator of future performance and should not be relied upon as a significant basis for an investment decision. You should consider whether an investment fits your investment objectives, particular needs and financial situation before making any investment decision.

Nothing in this website should be construed as investment, tax, legal or other advice.

The content of this website has not been approved by or filed with the UAE Central Bank or Dubai Financial Services Authority.

Access to this website is only permitted for ""sophisticated institutional investors/professional clients"". If you are not a ""sophisticated institutional investor/professional client"", you may not access this website and you should select the ""Decline"" link below.

By selecting the ""Accept"" button below, and entering this website, you agree to these terms and confirm and represent that you are a "" sophisticated institutional investor/professional client""."