The case for REITs in the mixed-asset portfolio in the short and long run

The poor performance of the Stock Market in the US up to the middle of 2003 has meant that REITs are increasingly been seen as an attractive addition to the mixed-asset portfolio. However, there is little evidence to indicate the consistency of the role REITs should play a role in the mixed-asset portfolio over different investment horizons. The results highlight that REITs do play a significant role over both different time horizons and holding periods. The findings show that REITs attractiveness as a diversification asset increase as the holding period increases. In addition, their diversification qualities span the entire efficient frontier, providing return enhancement properties at the lower end, switching to risk reduction qualities at the top end of the frontier.

Milk, dairy products and consumer health: a short review

There appears to be a large mis-match between (1) the advice given on milk/dairy foods by various authorities, (2) public perceptions of harm from the consumption of milk and dairy products and, (3) the evidence from long-term prospective cohort studies. These studies provide convincing evidence that increased consumption of milk can lead to reductions in the risk of vascular disease and possibly some cancers and provide an overall survival advantage. The volume of evidence available for milk products such as cheese and butter is however surprisingly limited and too small to come to any clear conclusions as to their effects on health.

Elevated atmospheric CO2 changes phosphorus fractions in soils under a short rotation poplar plantation (EuroFACE)

Future high levels of atmospheric carbon dioxide (CO2) may increase biomass production of terrestrial plants and hence plant requirements for soil mineral nutrients to sustain a greater biomass production. Phosphorus (P), an element essential for plant growth, is found in soils both in inorganic and in organic forms. In this work, three genotypes of Populus were grown under ambient and elevated atmospheric CO2 concentrations (FACE) for 5 years. An N fertilisation treatment was added in years 4 and 5 after planting. Using a fractionation scheme, total P was sequentially extracted using H2O, NaOH, HCl and HNO3, and P determined as both molybdate (Mo) reactive and total P. Molybdate-reactive P is defined as mainly inorganic but also some labile organic P which is determined by Vanado-molybdophosphoric acid colorimetric methods. Organic P was also measured to assess all plant available and weatherable P pools. We tested the hypotheses that higher P demand due to increased growth is met by a depletion of easily weatherable soil P pools, and that increased biomass inputs increases the amount of organic P in the soil. The concentration of organic P increased under FACE, but was associated with a decrease in total soil organic matter. The greatest increase in the soil P due to elevated CO2 was found in the HCl-extractable P fraction in the non-fertilised treatment. In the NaOH-extractable fraction the Mo-reactive P increased under FACE, but total P did not differ between ambient and FACE. The increase in both the NaOH- and HCl-extractable fractions was smaller after N addition. The results showed that elevated atmospheric CO2 has a positive effect on soil P availability rather than leading to depletion.We suggest that the increase in the NaOH- and HCl-extractable fractions is biologically driven by organic matter mineralization, weathering and mycorrhizal hyphal turnover.

An analysis of long-term trends, seasonality and short-term dynamics in water quality data from Plynlimon, Wales

This paper examines two hydrochemical time-series derived from stream samples taken in the Upper Hafren catchment, Plynlimon, Wales. One time-series comprises data collected at 7-hour intervals over 22 months (Neal et al., submitted, this issue), while the other is based on weekly sampling over 20 years. A subset of determinands: aluminium, calcium, chloride, conductivity, dissolved organic carbon, iron, nitrate, pH, silicon and sulphate are examined within a framework of non-stationary time-series analysis to identify determinand trends, seasonality and short-term dynamics. The results demonstrate that both long-term and high-frequency monitoring provide valuable and unique insights into the hydrochemistry of a catchment. The long-term data allowed analysis of long-termtrends, demonstrating continued increases in DOC concentrations accompanied by declining SO4 concentrations within the stream, and provided new insights into the changing amplitude and phase of the seasonality of the determinands such as DOC and Al. Additionally, these data proved invaluable for placing the short-term variability demonstrated within the high-frequency data within context. The 7-hour data highlighted complex diurnal cycles for NO3, Ca and Fe with cycles displaying changes in phase and amplitude on a seasonal basis. The high-frequency data also demonstrated the need to consider the impact that the time of sample collection can have on the summary statistics of the data and also that sampling during the hours of darkness provides additional hydrochemical information for determinands which exhibit pronounced diurnal variability. Moving forward, this research demonstrates the need for both long-term and high-frequency monitoring to facilitate a full and accurate understanding of catchment hydrochemical dynamics.

Pricing short leases and break clauses using simulation methodology

This paper examines the changes in the length of commercial property leases over the last decade and presents an analysis of the consequent investment and occupational pricing implications for commercial property investmentsIt is argued that the pricing implications of a short lease to an investor are contingent upon the expected costs of the letting termination to the investor, the probability that the letting will be terminated and the volatility of rental values.The paper examines the key factors influencing these variables and presents a framework for incorporating their effects into pricing models.Approaches to their valuation derived from option pricing are critically assessed. It is argued that such models also tend to neglect the price effects of specific risk factors such as tenant circumstances and the terms of break clause. Specific risk factors have a significant bearing on the probability of letting termination and on the level of the resultant financial losses. The merits of a simulation methododology are examined for rental and capital valuations of short leases and properties with break clauses.It is concluded that in addition to the rigour of its internal logic, the success of any methodology is predicated upon the accuracy of the inputs.The lack of reliable data on patterns in, and incidence of, lease termination and the lack of reliable time series of historic property performance limit the efficacy of financial models.