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The Role of International Property Trusts in Australian Mixed-Asset Portfolios

Author/s: Tan Yen Keng

Date Published: 1/01/2004

Published in: Volume 10 - 2004 Issue 2 (pages 215 - 234)

Abstract

As more LPTs invest overseas, the percentage of international property in LPTs has expanded to over 30% of the total LPT market value. This development has offered new investment opportunities to Australian investors, especially smaller fund managers, to gain exposure to indirect international property investment. Findings of this paper suggest that the addition of international LPTs to the Australian mixed-asset portfolio has resulted in significant diversification gain. The diversification benefit is even more remarkable when direct property is included in the mixed-asset portfolio. Even when the allocations to international LPTs and direct property were constrained, the international LPTs, property and financial assets’ portfolio still outperformed other mixed-asset portfolios.

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Keywords

Diversification - International Property Trust - Listed Property Trusts (Lpts) - Mixed-Asset Portfolio

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