South African Journal of Economic and Management Sciences, Vol 12, No 4 (2009)

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An investigation into the role of listed property shares in a retirement fund portfolio in South Africa

Mkhethwa Mkhize, Vuyani Bekwa

Abstract


The main aim of this research paper was to investigate the role of listed property shares in a retirement fund portfolio in South Africa, one objective being to determine the appropriate weightings to be allocated to listed property shares. This research paper uses data collected from January 1995 to December 2004. The Elton and Gruber computer programme is used to test the data to give optimal weightings to the listed property sector and to produce an efficient frontier. The results of this research paper demonstrated the benefits offered by listed property shares and revealed that the sector should be treated as a separate asset class from equity owing to low correlation of returns between these two classes of assets. Results also demonstrated that an increase in the allocation to the listed property sector results in better investment performance over the study period.

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EISSN 2222-3436 (Online)