C. Real Estate vs. Other Asset Classes (1/2)
Property versus other asset classes: Long-term performance
(annual in %)
Bond All property Equities
Source: EUROPE -All property: IPD all European pooled property fiunds index, Equities: Morgan Stanley Capital International, Bonds: JP Morgan Co Incorporated USA- IBBOTSON 2009 (1978 to 2008 data) Property: NCREIF-MIT, Equities: S&P 500, Bonds: US Long-term (20 y) Treasury Ibbotson.
Real estate is a significant asset class with specific characteristics:
Size of the real estate market
Risk/return profile (between stocks and bonds)
Diversification benefits due to low cross-correlation with financial assets
High proportion of total return in current cash yield
Hedge against unanticipated inflation
Real estate’s relatively low correlation with other asset classes make it a source of diversification in a portfolio.
Source: Generali Immobiliare Research
Assicurazioni Generali Group – Investor Day 2010 – Investment Management of Insurance Assets