The relationship between size, diversification and risk

Property portfolio diversification takes many forms, most of which can be associated with asset size. In other words larger property portfolios are assumed to have greater diversification potential than small portfolios. In addition, since greater diversification is generally associated with lower risk it is assumed that larger property portfolios will also have reduced return variability compared with smaller portfolios. If large property portfolios can simply be regarded as scaled-up, better-diversified versions of small property portfolios, then the greater a portfolio’s asset size, the lower its risk. This suggests a negative relationship between asset size and risk. However, if large property portfolios are not simply scaled-up versions of small portfolios, the relationship between asset size and risk may be unclear. For instance, if large portfolios hold riskier assets or pursue more volatile investment strategies, it may be that a positive relationship between asset size and risk would be observed, even if large property portfolios are more diversified. This paper tests the empirical relationship between property portfolio size, diversification and risk, in Institutional portfolios in the UK, during the period from 1989 to 1999 to determine which of these two characterisations is more appropriate.

Factors influencing adoption of improved grassland management by small-scale dairy farmers in central Mexico and the implications for future research on smallholder adoption in developing countries

There have been limited recent advances in understanding of what influences uptake of innovations despite the current international focus on smallholder agriculture as a means of achieving food security and rural development. This paper provides a rigorous study of factors influencing adoption by smallholders in central Mexico and builds on findings to identify a broad approach to significantly improve research on and understanding of factors influencing adoption by smallholders in developing countries. Small-scale dairy systems play an important role in providing income, employment and nutrition in the highlands of central Mexico. A wide variety of practices and technologies have been promoted by the government public services to increase milk production and economic efficiency, but there have been very low levels of uptake of most innovations, with the exception of improving grassland through introduction of grass varieties together with management practices. A detailed study was conducted with 80 farmers who are already engaged with the use of this innovation to better understand the process of adoption and identify socioeconomic and farm variables, cognitive (beliefs), and social–psychological (social norms) factors associated with farmers' use of improved grassland. The Theory of Reasoned Action (TRA) was used as a theoretical framework and Spearman Rank Order correlation was conducted to analyse the data. Most farmers (92.5%) revealed strong intention to continue to use improved grassland (which requires active management and investment of resources) for the next 12 months; whereas 7.5% of farmers were undecided and showed weak intention, which was associated with farmers whose main income was from non-farm activities as well as with farmers who had only recently started using improved grassland. Despite farmers' experience of using improved grassland (mean of 18 years) farmers' intentions to continue to adopt it was influenced almost as much by salient referents (mainly male relatives) as by their own attitudes. The hitherto unnoticed longevity of the role social referents play in adoption decisions is an important finding and has implications for further research and for the design of extension approaches. The study demonstrates the value and importance of using TRA or TPB approaches to understand social cognitive (beliefs) and social–psychological (social norms) factors in the study of adoption. However, other factors influencing adoption processes need to be included to provide fuller understanding. An approach that would enable this, and the development of more generalisable findings than from location specific case studies, and contribute to broader conceptualisation, is proposed.

The Jua Kali and the Mali-Mali: the informal/formal nexus amongst Kenyan micro enterprises

This paper presents a preliminary exploration of the informal/formal economy nexus and entrepreneurial processes amongst a sample of Kenyan roadside vendors who mostly operate in the informal economy. Using semi-structured interviews, data was collected from sixty street vendors across Kenya. In particular the paper focuses on the relationship between the informal and formal economy and the factors that promote formality amongst micro and small enterprises in developing countries. The paper presents a conceptualization of a potential segmentation of the informal economy, considering the implications of this in terms of base of the pyramid initiatives and the promotion of development through enterprise.

Islamic mutual funds' financial performance and international investment style: evidence from 20 countries

We pursue the first large-scale investigation of a strongly growing mutual fund type: Islamic funds. Based on an unexplored, survivorship bias-adjusted data set, we analyse the financial performance and investment style of 265 Islamic equity funds from 20 countries. As Islamic funds often have diverse investment regions, we develop a (conditional) three-level Carhart model to simultaneously control for exposure to different national, regional and global equity markets and investment styles. Consistent with recent evidence for conventional funds, we find Islamic funds to display superior learning in more developed Islamic financial markets. While Islamic funds from these markets are competitive to international equity benchmarks, funds from especially Western nations with less Islamic assets tend to significantly underperform. Islamic funds’ investment style is somewhat tilted towards growth stocks. Funds from predominantly Muslim economies also show a clear small cap preference. These results are consistent over time and robust to time varying market exposures and capital market restrictions.

Residential investment and sustainable communities

This research examines the scope for more private rented housing as part of securing housing choice and affordability. A comprehensive review covers the current UK planning, housing and investment framework. It examines UK valuation practice and draws lessons from the Netherlands and Canada. UK case studies illustrate how private companies and social organisations are challenging commonly perceived barriers to mixed-use, mixed-tenure and rented housing through imaginative developments and investments. Additionally, the case studies incorporate financial appraisals of actual schemes and illustrate the reasons for different approaches by private and social organisations to assessing financial feasibility, based on their individual objectives. The report provides a practical resource for property professionals, investors and developers as well as an aid to policy makers in understanding property and investment market responses. The research was funded through the Pat Allsop Education Trust.

Simulating current global river runoff with a global hydrological model: model revisions, validation, and sensitivity analysis

Global hydrological models (GHMs) model the land surface hydrologic dynamics of continental-scale river basins. Here we describe one such GHM, the Macro-scale - Probability-Distributed Moisture model.09 (Mac-PDM.09). The model has undergone a number of revisions since it was last applied in the hydrological literature. This paper serves to provide a detailed description of the latest version of the model. The main revisions include the following: (1) the ability for the model to be run for n repetitions, which provides more robust estimates of extreme hydrological behaviour, (2) the ability of the model to use a gridded field of coefficient of variation (CV) of daily rainfall for the stochastic disaggregation of monthly precipitation to daily precipitation, and (3) the model can now be forced with daily input climate data as well as monthly input climate data. We demonstrate the effects that each of these three revisions has on simulated runoff relative to before the revisions were applied. Importantly, we show that when Mac-PDM.09 is forced with monthly input data, it results in a negative runoff bias relative to when daily forcings are applied, for regions of the globe where the day-to-day variability in relative humidity is high. The runoff bias can be up to - 80% for a small selection of catchments but the absolute magnitude of the bias may be small. As such, we recommend future applications of Mac-PDM.09 that use monthly climate forcings acknowledge the bias as a limitation of the model. The performance of Mac-PDM.09 is evaluated by validating simulated runoff against observed runoff for 50 catchments. We also present a sensitivity analysis that demonstrates that simulated runoff is considerably more sensitive to method of PE calculation than to perturbations in soil moisture and field capacity parameters.

Small-angle x-ray scattering study of flow alignment of a thermotropic liquid crystal in the nematic and smectic phases

WThe capillary flow alignment of the thermotropic liquid crystal 4-n-octyl-4′-cyanobiphenyl in the nematic and smectic phases is investigated using time-resolved synchrotron small-angle x-ray scattering. Samples were cooled from the isotropic phase to erase prior orientation. Upon cooling through the nematic phase under Poiseuille flow in a circular capillary, a transition from the alignment of mesogens along the flow direction to the alignment of layers along the flow direction (mesogens perpendicular to flow) appears to occur continuously at the cooling rate applied. The transition is centered on a temperature at which the Leslie viscosity coefficient α3 changes sign. The configuration with layers aligned along the flow direction is also observed in the smectic phase. The transition in the nematic phase on cooling has previously been ascribed to an aligning-nonaligning or tumbling transition. At high flow rates there is evidence for tumbling around an average alignment of layers along the flow direction. At lower flow rates this orientation is more clearly defined. The layer alignment is ascribed to surface-induced ordering propagating into the bulk of the capillary, an observation supported by the parallel alignment of layers observed for a static sample at low temperatures in the nematic phase.

Inter-relationships between small, dense low-density lipoprotein (LDL), plasma triacylglycerol and LDL apoprotein B in an atherogenic lipoprotein phenotype in free-living subjects

A predominance of small, dense low-density lipoprotein (LDL) is a major component of an atherogenic lipoprotein phenotype, and a common, but modifiable, source of increased risk for coronary heart disease in the free-living population. While much of the atherogenicity of small, dense LDL is known to arise from its structural properties, the extent to which an increase in the number of small, dense LDL particles (hyper-apoprotein B) contributes to this risk of coronary heart disease is currently unknown. This study reports a method for the recruitment of free-living individuals with an atherogenic lipoprotein phenotype for a fish-oil intervention trial, and critically evaluates the relationship between LDL particle number and the predominance of small, dense LDL. In this group, volunteers were selected through local general practices on the basis of a moderately raised plasma triacylglycerol (triglyceride) level (>1.5 mmol/l) and a low concentration of high-density-lipoprotein cholesterol (<1.1 mmol/l). The screening of LDL subclasses revealed a predominance of small, dense LDL (LDL subclass pattern B) in 62% of the cohort. As expected, subjects with LDL subclass pattern B were characterized by higher plasma triacylglycerol and lower high-density lipoprotein cholesterol (<1.1 mmol/l) levels and, less predictably, by lower LDL cholesterol and apoprotein B levels (P<0.05; LDL subclass A compared with subclass B). While hyper-apoprotein B was detected in only five subjects, the relative percentage of small, dense LDL-III in subjects with subclass B showed an inverse relationship with LDL apoprotein B (r=-0.57; P<0.001), identifying a subset of individuals with plasma triacylglycerol above 2.5 mmol/l and a low concentration of LDL almost exclusively in a small and dense form. These findings indicate that a predominance of small, dense LDL and hyper-apoprotein B do not always co-exist in free-living groups. Moreover, if coronary risk increases with increasing LDL particle number, these results imply that the risk arising from a predominance of small, dense LDL may actually be reduced in certain cases when plasma triacylglycerol exceeds 2.5 mmol/l.

Style analysis in real estate markets: beyond the sectors and regions dichotomy

While style analysis has been studied extensively in equity markets, applications of this valuable tool for measuring and benchmarking performance and risk in a real estate context are still relatively new. Most previous real estate studies on this topic have identified three investment categories (rather than styles): sectors, administrative regions and economic regions. However, the low explanatory power reveals the need to extend this analysis to other investment styles. We identify four main real estate investment styles and apply a multivariate model to randomly generated portfolios to test the significance of each style in explaining portfolio returns. Results show that significant alpha performance is significantly reduced when we account for the new investment styles, with small vs. big properties being the dominant one. Secondly, we find that the probability of obtaining alpha performance is dependent upon the actual exposure of funds to style factors. Finally we obtain that both alpha and systematic risk levels are linked to the actual characteristics of portfolios. Our overall results suggest that it would be beneficial for real estate fund managers to use these style factors to set benchmarks and to analyze portfolio returns.

Unusual isotope effect in the reaction of chlorosilylene with trimethylsilane-1-d: Absolute rate studies and quantum chemical and Rice–Ramsperger–Kassel–Marcus calculations provide strong evidence for the involvement of an intermediate complex

Time-resolved studies of chlorosilylene, ClSiH, generated by the 193 nm laser flash photolysis of 1-chloro-1- silacyclopent-3-ene, have been carried out to obtain rate constants for its bimolecular reaction with trimethylsilane-1-d, Me3SiD, in the gas phase. The reaction was studied at total pressures up to 100 Torr (with and without added SF6) over the temperature range of 295−407 K. The rate constants were found to be pressure independent and gave the following Arrhenius equation: log[(k/(cm3 molecule−1 s−1)] = (−13.22 ± 0.15) + [(13.20 ± 1.00) kJ mol−1]/(RT ln 10). When compared with previously published kinetic data for the reaction of ClSiH with Me3SiH, kinetic isotope effects, kD/kH, in the range from 7.4 (297 K) to 6.4 (407 K) were obtained. These far exceed values of 0.4−0.5 estimated for a single-step insertion process. Quantum chemical calculations (G3MP2B3 level) confirm not only the involvement of an intermediate complex, but also the existence of a low-energy internal isomerization pathway which can scramble the D and H atom labels. By means of Rice−Ramsperger−Kassel−Marcus modeling and a necessary (but small) refinement of the energy surface, we have shown that this mechanism can reproduce closely the experimental isotope effects. These findings provide the first experimental evidence for the isomerization pathway and thereby offer the most concrete evidence to date for the existence of intermediate complexes in the insertion reactions of silylenes.

International office investment in global cities: the production of financial space and systemic risk

The paper explores the relationships between UK commercial real estate and regional economic development as a foundation for the analysis of the role of real estate investment in local economic development. Linkages between economic growth, development, real estate performance and investment allocations are documented. Long-run regional property performance is not the product of long-run economic growth, and weakly related to indicators of long-run supply and demand. Changes in regional portfolio weights seem driven by neither market performance nor underlying fundamentals. In the short run, regional investment shifts show no clear leads or lags with market performance.