TY - JOUR T1 - Does Valuation-Indifferent Indexing Work for the Real Estate Market? JF - The Journal of Investing SP - 72 LP - 79 DO - 10.3905/joi.2010.19.3.072 VL - 19 IS - 3 AU - Jason C. Hsu AU - Feifei Li AU - Vitali Kalesnik Y1 - 2010/08/31 UR - https://pm-research.com/content/19/3/72.abstract N2 - In historical testing, valuation-indifferent indexing produces statistically significant and economically large outperformance relative to traditional capitalization-weighted indexes. This result has been found for both U.S. and global equity data, as well as U.S. corporate bonds and emerging market bonds. This article reports a research application of the valuation-indifferent indexing method to construct two indexes covering U.S. and international-listed real estate companies. The authors find that the valuation-indifferent real estate indexes outperform the corresponding cap-weighted benchmark indexes by 3.96% (U.S. market) and 2.9% (global ex-U.S. market) per year. This finding suggests that using a valuation-indifferent indexing strategy can significantly improve the performance of passive real estate investing.TOPICS: Real estate, security analysis and valuation, mutual funds/passive investing/indexing ER -