The role of international property trusts in Australian mixed asset portfolios

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