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Purpose
The purpose of this paper is to build a case for globally diversified core real estate funds portfolio.
Design/methodology/approach
It uses Monte Carlo simulation technique to construct synthetic real estate funds portfolios.
Findings
Benefit of maintaining globally diversified real estate funds portfolio merits admission. An optimal portfolio has an almost even split between Europe, USA and Asia Pacific, ceteris paribus. Likewise, currency effect for Europe domiciled investors is undeniable.
Practical implications
The overall estimates suggest that a blend of APAC, European and US allocations enhance portfolio risk return profile.
Originality/value
The study adds additional evidence on the contested issue of real estate diversification.
© Emerald Publishing Limited
2019
Emerald Publishing Limited
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