The Performance Of 16 Small Group Of Reits

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Smith and Shulman (1976) analyzed and compared the performance of 16 small group of REITs to the S&P 500 index, saving accounts, and 15 closed-end funds over the twelve-year periods from 1963 to 1974. They found that on average, REITs provide higher returns than the S&P index and saving accounts over 1963-1973 periods. However, the performance of REIT stocks was extremely poor (underperformed) in 1974 that their REITs underperformed the S&P 500 index over 1963-1974 periods if the recession year of 1974 is included. Kuhle et al. (1986) also discovered that REITs underperformed the S&P 500 in 1973-1976 period and outperformed the S&P index in 1977-1984 period. Titman and Warga (1986) concluded that the risk-adjusted return performance of…show more content…
With the use of standard risk-adjusted performance measures of Sharpe (1966), Treynor (1965) and Jensen (1968), Benefield et al. (2009) examined the differences in performance between diversified and specialized REITs. They found significant differences in risk-adjusted performance between diversified and specialized REITs and the difference is depend on the overall market condition. Diversified property type REITs have outperformed during good market conditions than those specialized property type REITs. They did not reject that during less favourable market conditions, specialized REITs have better performance than those diversified REITs. Kim et al. (2002) conducted a comparative analysis of Jensen’s alphas to examine the performance of hotel REITs with those of the overall market and six other REIT sectors using Jensen Index over the 1993–1999 period. The results show that while risk-adjusted return of hotel REITs was in line with that of the overall market, the hotel REIT sector as a portfolio underperformed office, industrial, and diversified REIT sector. Studies in Singapore and Malaysia Liow (1997) examined the historical performance of Singapore property share returns in 1975-1995 and found that the property

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