Risk and Return Characteristics of Property Indices in Emerging Markets

42 Pages Posted: 22 Sep 2003

See all articles by Christopher B. Barry

Christopher B. Barry

Texas Christian University - M.J. Neeley School of Business

Mauricio Rodriguez

Texas Christian University

Date Written: September 3, 2003

Abstract

We examine the investment performance and diversification benefits of real estate investments in emerging capital markets using property indices, and we contrast the risk and return characteristics of those property indices with the broader equity markets in those countries and with real estate and broader equity investments in developed markets. Real estate indices experienced relatively high total risk and low returns, but only a few of these indices underperformed on a risk-adjusted basis. Despite lackluster performance, real estate investments in emerging markets offered diversification opportunities to equity market investors in emerging markets as well as to real estate and equity market investors in developed markets. Policy makers in some countries support restrictions that limit investments abroad. These legislators should recognize that there is a tradeoff between potential benefits from keeping capital in their domestic markets versus reductions in diversification benefits available to their constituents.

Keywords: real estate, emerging markets, performance, diversification, risk and return

JEL Classification: F0, F3, G0, G2

Suggested Citation

Barry, Christopher B. and Rodriguez, Mauricio, Risk and Return Characteristics of Property Indices in Emerging Markets (September 3, 2003). Available at SSRN: https://ssrn.com/abstract=441840 or http://dx.doi.org/10.2139/ssrn.441840

Christopher B. Barry

Texas Christian University - M.J. Neeley School of Business ( email )

Box 298530
Fort Worth, TX 76129
United States

Mauricio Rodriguez (Contact Author)

Texas Christian University ( email )

P.O. Box 298530
Fort Worth, TX 76129
United States
817-921-7514 (Phone)
817-921-7227 (Fax)

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