Investors who add shares of open-end property funds and REITs to their portfolios realise more attractive risk-return ratios than those who don't, according to a study commssioned by Germany's Commerz Grundbesitz group. The study, carried out by the Institut fur Vermogensaufbau in Munich, was based on an assessment of more than 15,000 private investor portfolios with a combined volume of EUR 1.9 bn over the period 1999-2007.

Investors who add shares of open-end property funds and REITs to their portfolios realise more attractive risk-return ratios than those who don't, according to a study commssioned by Germany's Commerz Grundbesitz group. The study, carried out by the Institut fur Vermogensaufbau in Munich, was based on an assessment of more than 15,000 private investor portfolios with a combined volume of EUR 1.9 bn over the period 1999-2007.

The researchers found that open-end property funds lowered the investment risk by a higher margin than did money market and bond shares. Adding shares of open-end property funds to professonal reference portfolios lowered the risk by up to 20%. A similar effect was found for private investor portfolios. At the same time, the addition of open-end funds was found to improve the yield expectations for aggressive deposits.

Integrating REITs in both professional and privately structured portfolios resulted in up to 1.3% higher returns, the study revealed. Although this approach involved a higher risk, it improved the overall risk/return ratio. Here, too, the positive effect intensified in proportion to the reference portfolio's previous money market and bond share.