@article {Hsu72, author = {Jason C. Hsu and Feifei Li and Vitali Kalesnik}, title = {Does Valuation-Indifferent Indexing Work for the Real Estate Market?}, volume = {19}, number = {3}, pages = {72--79}, year = {2010}, doi = {10.3905/joi.2010.19.3.072}, publisher = {Institutional Investor Journals Umbrella}, abstract = {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}, issn = {1068-0896}, URL = {https://joi.pm-research.com/content/19/3/72}, eprint = {https://joi.pm-research.com/content/19/3/72.full.pdf}, journal = {The Journal of Investing} }