IDEAS home Printed from https://ideas.repec.org/a/taf/jpropr/v31y2014i1p1-25.html
   My bibliography  Save this article

Performance of global listed infrastructure investment in a mixed asset portfolio

Author

Listed:
  • Joseph B. Oyedele
  • Alastair Adair
  • Stanley McGreal

Abstract

This paper seeks to examine global infrastructure investment performance compared with other global asset classes such as stocks, bonds, real estate investment trusts, property, hedge funds and private equity. The paper examines the level of correlation of infrastructure with the other assets classes largely reflecting the diversification potential of infrastructure within a mixed asset portfolio. Monthly return indices obtained from Thomson Reuters DataStream over a 10-year period (2001--2010) facilitated the examination of listed infrastructure investment return characteristics including average annual return, annual risk, Sharpe index, mean variance portfolio and maximum return portfolio. Efficient portfolio frontiers were computed using risk solver platform version 11. From a global perspective, investments in infrastructure show a robust comparative performance over the 10-year timeframe (2001--2010). The study is supportive of the argument that the inclusion of infrastructure in a mixed asset portfolio enhances investment performance. The role of global infrastructure in a multi-asset portfolio is shown to be more risk reduction rather than enhancement of return. From a practical viewpoint, the systematic allocation of between 10 and 17.63% of infrastructure into a global investment portfolio can significantly enhance diversification benefits for investors.

Suggested Citation

  • Joseph B. Oyedele & Alastair Adair & Stanley McGreal, 2014. "Performance of global listed infrastructure investment in a mixed asset portfolio," Journal of Property Research, Taylor & Francis Journals, vol. 31(1), pages 1-25, March.
    • Handle: RePEc:taf:jpropr:v:31:y:2014:i:1:p:1-25
    DOI: 10.1080/09599916.2012.737819
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09599916.2012.737819
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09599916.2012.737819?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Blanca Sanchez‐Robles, 1998. "Infrastructure Investment And Growth: Some Empirical Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 16(1), pages 98-108, January.
    2. Peter Hobbs & Loneke Lowik, 2007. "European Infrastructure Markets: The Emergence of an Alternative Asset Class," ERES eres2007_318, European Real Estate Society (ERES).
    3. repec:arz:wpaper:eres2007-318 is not listed on IDEAS
    4. Luke McInerney & Chris Nadarajah & Frances Perkins, 2007. "Australia’s infrastructure policy and the COAG National Reform Agenda," Economic Roundup, The Treasury, Australian Government, issue 1, pages 17-49, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Surbhi Gupta & Anil Kumar Sharma, 2022. "Evolution of infrastructure as an asset class: a systematic literature review and thematic analysis," Journal of Asset Management, Palgrave Macmillan, vol. 23(3), pages 173-200, May.
    2. Sulaiman T. Al-Abduljader, 2018. "International Diversification in Frontier Real Estate Markets," International Real Estate Review, Global Social Science Institute, vol. 21(1), pages 93-112.
    3. repec:ire:issued:v:22:n:01:2019:p:85-110 is not listed on IDEAS
    4. Wouter Thierie & Lieven Moor, 2016. "The characteristics of infrastructure as an investment class," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(3), pages 277-297, August.
    5. Sulaiman T. Al-Abduljader, 2019. "Interdependence of Securitized Real Estate in Frontier Markets," International Real Estate Review, Global Social Science Institute, vol. 22(1), pages 83-108.
    6. Tanzeem Hasnat, 2021. "Infrastructure Equity and Firm Performance in India," Millennial Asia, , vol. 12(1), pages 97-115, April.
    7. Daniel Wurstbauer & Wolfgang Schäfers, 2015. "Inflation hedging and protection characteristics of infrastructure and real estate assets," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 33(1), pages 19-44, February.
    8. Louis Chakkalakal & Ulrich Hommel & Wenwei Li, 2018. "Transport infrastructure equities in mixed-asset portfolios: estimating risk with a Garch-Copula CVaR model," Journal of Property Research, Taylor & Francis Journals, vol. 35(2), pages 117-138, April.
    9. Muhammad Jufri Marzuki & Graeme Newell, 2020. "The investment opportunities in the innovation-led listed satellite and telecommunication infrastructure sectors," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 39(3), pages 223-238, April.
    10. Muhammad Jufri Marzuki & Graeme Newell, 2020. "A global investment opportunity in non-listed infrastructure for institutional investors," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 39(3), pages 239-255, May.
    11. Frédéric Blanc-Brude & Timothy Whittaker & Simon Wilde, 2017. "Searching for a listed infrastructure asset class using mean–variance spanning," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 31(2), pages 137-179, May.
    12. Graeme Newell, 2021. "Future research opportunities for Asian real estate," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 25(2), pages 272-290, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    2. repec:cuf:journl:y:2014:v:15:i:2:calderon:serven is not listed on IDEAS
    3. Silvia Bertarelli, 2006. "Public capital and growth," Politica economica, Società editrice il Mulino, issue 3, pages 361-398.
    4. Kazeem Bello Ajide & Perekunah Bright Eregha, 2015. "Foreign Direct Investment, Economic Freedom and Economic Performance in Sub-Saharan Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(1 (Spring), pages 43-57.
    5. Diaz-Bautista, Alejandro, 2002. "The role of telecommunications infrastructure and human capital: Mexico´s economic growth and convergence," ERSA conference papers ersa02p102, European Regional Science Association.
    6. Mehmet Aldonat Beyzatlar & Mehmet Yeşim Kuştepeli, 2011. "Infrastructure, Economic Growth and Population Density in Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 4(3), pages 39-57, December.
    7. Sodiq Arogundade & Mduduzi Biyase & Hinaunye Eita, 2021. "Foreign Direct Investment and poverty in Sub-Saharan African countries: the role of host absorptive capacity," Economic Development and Well-being Research Group Working Paper Series edwrg-04-2021, University of Johannesburg, College of Business and Economics, revised 2021.
    8. Eduardo Lora & Patricia Cortés, 2001. "Los obstáculos al desarrollo empresarial y el tamaño de las firmas en América Latina," Research Department Publications 4258, Inter-American Development Bank, Research Department.
    9. Noman Arshed & Muhammad Shahid Hassan & Muhammad Umair Khan & Arslan Arif Uppal, 2022. "Moderating Effects of Logistics Infrastructure Development and Real Sector Productivity: A Case of Pakistan," Global Business Review, International Management Institute, vol. 23(3), pages 676-693, June.
    10. Ahmed, Riaz, 2016. "Social infrastructure and productivity of manufacturing firms: Evidence from Pakistan," ZEW Discussion Papers 16-038, ZEW - Leibniz Centre for European Economic Research.
    11. Mary Morrison & Marianne Fay, 2005. "Infrastructure in Latin America : Recent Developments and Key Challenges, Volume 1," World Bank Publications - Reports 8801, The World Bank Group.
    12. Dimitrios Paparas & Christian Richter, 2015. "Fiscal policy and economic growth: Empirical evidence from the European Union," Working Papers 2015.06, International Network for Economic Research - INFER.
    13. Eduardo Lora & Patricia Cortés, 2001. "Obstacles to Business Development and the Size of Firms in Latin America," Research Department Publications 4257, Inter-American Development Bank, Research Department.
    14. Dimitrios PAPARAS & Christian RICHTER & Alexandros PAPARAS, 2015. "Fiscal Policy and Economic Growth, Empirical Evidence in European Union," Turkish Economic Review, KSP Journals, vol. 2(4), pages 239-268, December.
    15. Agénor, Pierre-Richard & Bayraktar, Nihal & El Aynaoui, Karim, 2008. "Roads out of poverty? Assessing the links between aid, public investment, growth, and poverty reduction," Journal of Development Economics, Elsevier, vol. 86(2), pages 277-295, June.
    16. Díaz, Luis & Andonova, Veneta Stefanova, 2007. "Political institutions and the development of telecommunications," Working Papers 2072/4176, Universitat Rovira i Virgili, Department of Economics.
    17. Agenor,Pierre-Richard, 2003. "The mini-integrated macroeconomic model for poverty analysis : a framework for analyzing the unemployment and poverty effects of fiscal and labor market reforms," Policy Research Working Paper Series 3067, The World Bank.
    18. Youze Lang & Qiuyi Yang, 2019. "Does Public Infrastructure Breed Consumption Downgrade and Overcapacity in China? A DSGE Approach on Macroeconomic Effects," Sustainability, MDPI, vol. 11(3), pages 1-23, February.
    19. Greg Coombs & Chris Roberts, 2007. "Trends in infrastructure," Economic Roundup, The Treasury, Australian Government, issue 1, pages 1-16, February.
    20. Calderon, Cesar & Serven, Luis, 2008. "Infrastructure and economic development in Sub-Saharan Africa," Policy Research Working Paper Series 4712, The World Bank.
    21. Halkos, George & Paizanos, Epameinondas, 2015. "Fiscal policy and economic performance: A review of the theoretical and empirical literature," MPRA Paper 67737, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jpropr:v:31:y:2014:i:1:p:1-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJPR20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.