Sector, region or function? A MAD reassessment of real estate diversification in Great Britain

This paper re-examines whether it is more advantageous in terms of risk reduction to diversify by sector or region by comparing the performance of the ‘conventional’ regional classification of the UK with one based on modern socio-economic criteria using a much larger real estate data set than any previous study and the MAD portfolio approach. The general conclusion of this analysis is that property market sectors still dominate regions, however defined and so should be the first level of analysis when developing a portfolio diversification strategy. This is in line with previous research. When the performance of Functional groups is compared with the ‘conventional’ administrative regions the results here show that, when functionally based, groupings can in some cases provide greater risk reduction. In addition the underlying characteristics of these functional groups may be much more insightful and acceptable to real estate portfolio managers in considering the assets that a portfolio might contain.

Testing the statistical significance of sector & regional diversification

The question as to whether it is better to diversify a real estate portfolio within a property type across the regions or within a region across the property types is one of continuing interest for academics and practitioners alike. The current study, however, is somewhat different from the usual sector/regional analysis taking account of the fact that holdings in the UK real estate market are heavily concentrated in a single region, London. As a result this study is designed to investigate whether a real estate fund manager can obtain a statistically significant improvement in risk/return performance from extending out of a London based portfolio into firstly the rest of the South East of England and then into the remainder of the UK, or whether the manger would be better off staying within London and diversifying across the various property types. The results indicating that staying within London and diversifying across the various property types may offer performance comparable with regional diversification, although this conclusion largely depends on the time period and the fund manager’s ability to diversify efficiently.

Dynamic correlations between REIT sub-sectors and the implications for diversification

The issue of whether Real Estate Investment Trusts (REITs) should pursue a focused or diversified investment strategy remains an ongoing debate within both the academic and industry communities. This article considers the relationship between REITs focused on different property sectors in a Generalized Autoregressive Conditional Heteroscedasticity-Dynamic Control Correlation (GARCH-DCC) framework. The daily conditional correlations reveal that since 1990 there has been a marked upward trend in the coefficients between US REIT sub-sectors. The findings imply that REITs are behaving in a far more homogeneous manner than in the past. Furthermore, the argument that REITs should be focused in order that investors can make the diversification decision is reduced.

An extreme case of plant-insect co-diversification: figs and fig-pollinating wasps

It is thought that speciation in phytophagous insects is often due to colonization of novel host plants, because radiations of plant and insect lineages are typically asynchronous. Recent phylogenetic comparisons have supported this model of diversification for both insect herbivores and specialized pollinators. An exceptional case where contemporaneous plant insect diversification might be expected is the obligate mutualism between fig trees (Ficus species, Moraceae) and their pollinating wasps (Agaonidae, Hymenoptera). The ubiquity and ecological significance of this mutualism in tropical and subtropical ecosystems has long intrigued biologists, but the systematic challenge posed by >750 interacting species pairs has hindered progress toward understanding its evolutionary history. In particular, taxon sampling and analytical tools have been insufficient for large-scale co-phylogenetic analyses. Here, we sampled nearly 200 interacting pairs of fig and wasp species from across the globe. Two supermatrices were assembled: on average, wasps had sequences from 77% of six genes (5.6kb), figs had sequences from 60% of five genes (5.5 kb), and overall 850 new DNA sequences were generated for this study. We also developed a new analytical tool, Jane 2, for event-based phylogenetic reconciliation analysis of very large data sets. Separate Bayesian phylogenetic analyses for figs and fig wasps under relaxed molecular clock assumptions indicate Cretaceous diversification of crown groups and contemporaneous divergence for nearly half of all fig and pollinator lineages. Event-based co-phylogenetic analyses further support the co-diversification hypothesis. Biogeographic analyses indicate that the presentday distribution of fig and pollinator lineages is consistent with an Eurasian origin and subsequent dispersal, rather than with Gondwanan vicariance. Overall, our findings indicate that the fig-pollinator mutualism represents an extreme case among plant-insect interactions of coordinated dispersal and long-term co-diversification.

Risk reduction and diversification in UK commercial property portfolios

The issue of diversification in direct real estate investment portfolios has been widely studied in academic and practitioner literature. Most work, however, has been done using either partially aggregated data or data for small samples of individual properties. This paper reports results from tests of both risk reduction and diversification that use the records of 10,000+ UK properties tracked by Investment Property Databank. It provides, for the first time, robust estimates of the diversification gains attainable given the returns, risks and cross‐correlations across the individual properties available to fund managers. The results quantify the number of assets and amount of money needed to construct both ‘balanced’ and ‘specialist’ property portfolios by direct investment. Target numbers will vary according to the objectives of investors and the degree to which tracking error is tolerated. The top‐level results are consistent with previous work, showing that a large measure of risk reduction can be achieved with portfolios of 30–50 properties, but full diversification of specific risk can only be achieved in very large portfolios. However, the paper extends previous work by demonstrating on a single, large dataset the implications of different methods of calculating risk reduction, and also by showing more disaggregated results relevant to the construction of specialist, sector‐focussed funds.

Liability of country foreignness and liability of regional foreignness: their effects on geographic diversification and firm performance

The costs of inter- and intra-regional diversification have been widely discussed in the existing international business literature, but the findings are mixed. Explanations for the mixed findings have important managerial implications, because business managers have to estimate accurately the costs of doing business within and across regions before they make their internationalization decisions. To explain the existing mixed findings, this study differentiates between liabilities of foreignness at the country and regional levels, and explores the joint effects of liability of country foreignness (LCF) and liability of regional foreignness (LRF) on the performance of internationalizing firms. Using data from 167 Canadian firms, we find that LCF may not necessarily be negatively correlated with intra-regional diversification, but LRF is positively correlated with inter-regional diversification. LCF moderates the relationship between LRF and inter-regional diversification, and also mediates the relationship between intra-regional diversification and firm performance. LRF mediates the relationship between inter-regional diversification and firm performance. Missing one or more of these variables may result in different cost estimates. Identification of the relationships between these variables helps to improve the accuracy of estimating the costs of doing business aboard.

The Tnt1 family member Retrosol copy number and structure disclose retrotransposon diversification in different Solanum species

Eukaryotic genome expansion/retraction caused by LTR-retrotransposon activity is dependent on the expression of full length copies to trigger efficient transposition and recombination-driven events. The Tnt1 family of retrotransposons has served as a model to evaluate the diversity among closely related elements within Solanaceae species and found that members of the family vary mainly in their U3 region of the long terminal repeats (LTRs). Recovery of a full length genomic copy of Retrosol was performed through a PCR-based approach from wild potato, Solanum oplocense. Further characterization focusing on both LTR sequences of the amplified copy allowed estimating an approximate insertion time at 2 million years ago thus supporting the occurrence of transposition cycles after genus divergence. Copy number of Tnt1-like elements in Solanum species were determined through genomic quantitative PCR whereby results sustain that Retrosol in Solanum species is a low copy number retrotransposon (1-4 copies) while Retrolyc1 has an intermediate copy number (38 copies) in S. peruvianum. Comparative analysis of retrotransposon content revealed no correlation between genome size or ploidy level and Retrosol copy number. The tetraploid cultivated potato with a cellular genome size of 1,715 Mbp harbours similar copy number per monoploid genome than other diploid Solanum species (613-884 Mbp). Conversely, S. peruvianum genome (1,125 Mbp) has a higher copy number. These results point towards a lineage specific dynamic flux regarding the history of amplification/activity of Tnt1-like elements in the genome of Solanum species.

Independent fusions and recent origins of sex chromosomes in the evolution and diversification of glass knife fishes (Eigenmannia)

The genus Eigenmannia comprises several species groups that display a surprising variety of diploid chromosome numbers and sex-determining systems. In this study, hypotheses regarding phylogenetic relationships and karyotype evolution were investigated using a combination of molecular and cytogenetic methods. Phylogenetic relationships were analyzed for 11 cytotypes based on sequences from five mitochondrial DNA regions. Parsimony-based character mapping of sex chromosomes confirms previous suggestions of multiple origins of sex chromosomes. Molecular cytogenetic analyses involved chromosome painting using probes derived from whole sex chromosomes from two taxa that were hybridized to metaphases of their respective sister cytotypes. These analyses showed that a multiple XY system evolved recently (<7 mya) by fusion. Furthermore, one of the chromosomes that fused to form the neo-Y chromosome is fused independently to another chromosome in the sister cytotype. This may constitute an efficient post-mating barrier and might imply a direct function of sex chromosomes in the speciation processes in Eigenmannia. The other chromosomal sex-determination system investigated is shown to have differentiated by an accumulation of heterochromatin on the X chromosome. This has occurred in the past 0.6 my, and is the most recent chromosomal sex-determining system described to date. These results show that the evolution of sex-determining systems can proceed very rapidly. Heredity (2011) 106, 391-400; doi:10.1038/hdy.2010.82; published online 23 June 2010

The timing of Neotropical speciation dynamics: A reconstruction of Myiopagis flycatcher diversification using phylogenetic and paleogeographic data

Neotropical forests have brought forth a large proportion of the world`s terrestrial biodiversity, but the underlying evolutionary mechanisms and their timing require further elucidation. Despite insights gained from phylogenetic studies, uncertainties about molecular clock rates have hindered efforts to determine the timing of diversification processes. Moreover, most molecular research has been detached from the extensive body of data on Neotropical geology and paleogeography. We here examine phylogenetic relationships and the timing of speciation events in a Neotropical flycatcher genus (Myiopagis) by using calibrations from modern geologic data in conjunction with a number of recently developed DNA sequence dating algorithms and by comparing these estimates with those based on a range of previously proposed molecular clock rates. We present a well-supported hypothesis of systematic relationships within the genus. Our age estimates of Myiopagis speciation events based on paleogeographic data are in close agreement with nodal ages derived from a ""traditional"" avian mitochondrial 2%/My clock, while contradicting other clock rates. Our comparative approach corroborates the consistency of the traditional avian mitochondrial clock rate of 2%/My for tyrant-flycatchers. Nevertheless, our results argue against the indiscriminate use of molecular clock rates in evolutionary research and advocate the verification of the appropriateness of the traditional clock rate by means of independent calibrations in individual studies. (C) 2009 Elsevier Inc. All rights reserved.

Phylogenetic relationships, diversification and biogeography in Neotropical Brotogeris parakeets

Aim We present a molecular phylogenetic analysis of Brotogeris (Psittacidae) using several distinct and complementary approaches: we test the monophyly of the genus, delineate the basal taxa within it, uncover their phylogenetic relationships, and finally, based on these results, we perform temporal and spatial comparative analyses to help elucidate the historical biogeography of the Neotropical region. Location Neotropical lowlands, including dry and humid forests. Methods Phylogenetic relationships within Brotogeris were investigated using the complete sequences of the mitochondrial genes cyt b and ND2, and partial sequences of the nuclear intron 7 of the gene for Beta Fibrinogen for all eight species and 12 of the 17 taxa recognized within the genus (total of 63 individuals). In order to delinetae the basal taxa within the genus we used both molecular and plumage variation, the latter being based on the examination of 597 skin specimens. Dates of divergence and confidence intervals were estimated using penalized likelihood. Spatial and temporal comparative analyses were performed including several closely related parrot genera. Results Brotogeris was found to be a monophyletic genus, sister to Myiopsitta. The phylogenetic analyses recovered eight well-supported clades representing the recognized biological species. Although some described subspecies are diagnosably distinct based on morphology, there was generally little intraspecific mtDNA variation. The Amazonian species had different phylogenetic affinities and did not group in a monophyletic clade. Brotogeris diversification took place during the last 6 Myr, the same time-frame as previously found for Pionus and Pyrilia. Main conclusions The biogeographical history of Brotogeris implies a dynamic history for South American biomes since the Pliocene. It corroborates the idea that the geological evolution of Amazonia has been important in shaping its biodiversity, argues against the idea that the region has been environmentally stable during the Quaternary, and suggests dynamic interactions between wet and dry forest habitats in South America, with representatives of the Amazonian biota having several independent close relationships with taxa endemic to other biomes.

The genetic effects of Late Quaternary climatic changes over a tropical latitudinal gradient: diversification of an Atlantic Forest passerine

The increase in biodiversity from high to low latitudes is a widely recognized biogeographical pattern. According to the latitudinal gradient hypothesis (LGH), this pattern was shaped by differential effects of Late Quaternary climatic changes across a latitudinal gradient. Here, we evaluate the effects of climatic changes across a tropical latitudinal gradient and its implications to diversification of an Atlantic Forest (AF) endemic passerine. We studied the intraspecific diversification and historical demography of Sclerurus scansor, based on mitochondrial (ND2, ND3 and cytb) and nuclear (FIB7) gene sequences. Phylogenetic analyses recovered three well-supported clades associated with distinct latitudinal zones. Coalescent-based methods were applied to estimate divergence times and changes in effective population sizes. Estimates of divergence times indicate that intraspecific diversification took place during Middle-Late Pleistocene. Distinct demographic scenarios were identified, with the southern lineage exhibiting a clear signature of demographic expansion, while the central one remained more stable. The northern lineage, contrasting with LGH predictions, exhibited a clear sign of a recent bottleneck. Our results suggest that different AF regions reacted distinctly, even in opposite ways, under the same climatic period, producing simultaneously favourable scenarios for isolation and contact among populations.

Out of Amazonia again and again: episodic crossing of the Andes promotes diversification in a lowland forest flycatcher

Most Neotropical lowland forest taxa occur exclusively on one side of the Andes despite the availability of appropriate habitat on both sides. Almost all molecular phylogenies and phylogenetic analyses of species assemblages (i.e. area cladograms) have supported the hypothesis that Andean uplift during the Late Pliocene created a vicariant barrier affecting lowland lineages in the region. However, a few widespread plant and animal species occurring in lowland forests on both sides of the Andes challenge the generality of this hypothesis. To understand the role of the Andes in the history of such organisms, we reconstructed the phylogeographic history of a widespread Neotropical flycatcher (Mionectes oleagineus) in the context of the other four species in the genus. A molecular phylogeny based on nuclear and mitochondrial sequences unambiguously showed an early basal split between montane and lowland Mionectes. The phylogeographic reconstruction of lowland taxa revealed a complex history, with multiple cases in which geographically proximate populations do not represent sister lineages. Specifically, three populations of M. oleagineus west of the Andes do not comprise a monophyletic clade; instead, each represents an independent lineage with origins east of the Andes. Divergence time estimates suggest that at least two cross-Andean dispersal events post-date Andean uplift.

Tenacity and silk investment of two orb weavers: considerations about diversification of the Araneoidea

Orbiculariae consists of two major clades: the cribellate Deinopidea and the much more diverse ecribellate Araneoidea. It has been hypothesized that the higher diversity of Araneoidea is a consequence of the superiority of the viscid orb web. However, this explanation seems incomplete: for example, cribellate silk may perform better than viscid silk in some contexts. Here, we consider the hypothesis that the diversification of Araneoidea was facilitated by changes in microhabitat occupation behavior due to the cheaper viscid orb web. In the present work we investigate the idea that the reduction in site tenacity caused by the emergence of the viscid orb web has led to an increase in the exploration of different resources and to a greater diversification of the Arancoidea through the evolutionary time. To test this idea, we evaluated the response of one cribellate orb web spider (Zosis geniculata Olivier 1789, Uloboridae) and one ecribellate orb web spider (Metazygia rogenhoferi Keyserling 1878, Arancidae) to abrupt prey absence. The changes in site tenacity and the day-to-day investment in web silk were evaluated. Spiders with three-dimensional webs tend to exhibit greater site tenacity than spiders making orb webs. Zosis geniculata and M. rogenhoferi show similar site tenacity when prey is ample. When prey is unavailable, the tenacity of the cribellate species increases while the tenacity of the ecribellate remains unchanged, and the silk investment of both species decreases. However, this decrease in silk investment is more extensive in Z. geniculata. These results coincide with the idea that a less costly ecribellate orb web leads to a lower tenacity and suggest that more frequent microhabitat abandonment in a context of insect radiation (Neiptera) leads to more diverse and opportunistic exploration of microhabitats that, in the long term, may be one explanation for the greater Araneoidea diversification.

Patterns of diversification in two species of short-tailed bats (Carollia Gray, 1838): the effects of historical fragmentation of Brazilian rainforests

The small-sized frugivorous bat Carollia perspicillata is an understory specialist and occurs in a wide range of lowland habitats, tending to be more common in tropical dry or moist forests of South and Central America. Its sister species, Carollia brevicauda, occurs almost exclusively in the Amazon rainforest. A recent phylogeographic study proposed a hypothesis of origin and subsequent diversification for C. perspicillata along the Atlantic coastal forest of Brazil. Additionally, it also found two allopatric clades for C. brevicauda separated by the Amazon Basin. We used cytochrome b gene sequences and a more extensive sampling to test hypotheses related to the origin and diversification of C. perspicillata plus C. brevicauda clade in South America. The results obtained indicate that there are two sympatric evolutionary lineages within each species. In C. perspicillata, one lineage is limited to the Southern Atlantic Forest, whereas the other is widely distributed. Coalescent analysis points to a simultaneous origin for C. perspicillata and C. brevicauda, although no place for the diversification of each species can be firmly suggested. The phylogeographic pattern shown by C. perspicillata is also congruent with the Pleistocene refugia hypothesis as a likely vicariant phenomenon shaping the present distribution of its intraspecific lineages. (C) 2011 The Linnean Society of London, Biological Journal of the Linnean Society, 2011, 102, 527-539.