Real Estate Trends and Portfolio Rebalancing: Evidence from Main European Markets
There has been much academic debate on the effectiveness of intra-asset diversification and on how to optimally apply it. Sectorial provenience and the location of real estate assets were initially the most valid segments for an efficient diversification (Miles and McCue, 1982). By this time, more sophisticated methods had been elaborated to provide a better segmentation, expanding the possibilities of intra-asset diversification. In particular, concerning the geographical segmentation, it had been proposed that regions — or urban areas — classified according to economic function might form a basis for a more effective risk management strategy (Lee and Byrne, 1998).
KeywordsReal Estate Optimal Portfolio Fund Manager Sharpe Ratio Asset Allocation
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