Direct and Indirect Investment for International Diversification

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Switching Model – Indirect or Direct 4.0 3.0 IPD EY less 5-year Swap Rate (%) 2.0 1.0 0.0 -1.0 -2.0 -3.0 -4.0 -5.0 Direct market to outperform over following 12 months Indirect market to outperform over following 12 months Point of indifference Oct-03 to Sept-04 Oct-02 to Sept-03 Oct-01 to Sept-02 -6.0 -6.5 -5.5 -4.5 -3.5 -2.5 -1.5 FTSE Real Estate DY less IPD EY (%) Sources: Datastream, IPD
Option 4: Derivatives “Available” today • Direct Property – UK and US only • Property equities- ETF’s on EPRA/NAREIT Positives • Quick/easy/cheap to trade • Instantaneous exposure • Price transparency • Strategic or tactical use Negatives • Currently small size/ limited supply • Very limited coverage of property markets • No guarantee of roll-over • Negative performance relative to market after costs
Page 1 and 2: Direct and Indirect Investment for
Page 3 and 4: Traditional Institutional Property
Page 5 and 6: IPD Returns UK Portugal Spain Franc
Page 7 and 8: Property Investment : Increasingly
Page 9 and 10: How to invest globally for diversif
Page 11 and 12: Direct vs. Indirect
Page 13 and 14: Property Risk/Return profile Volati
Page 15 and 16: Option 1: Direct property ownership
Page 17 and 18: Option 3: Listed/public property co
Page 19: Correlation of Global Asset Class R
Page 23 and 24: Conclusion: Direct and Indirect SIZ

Direct and Indirect Investment for International Diversification

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