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News Article: Low Volatility and the Sharpe Ratio in Open-Ended Real Estate Funds
In the world of investments, volatility is a constant factor that investors must consider. One tool that helps investors optimize their risk-reward trade-offs is the Sharpe ratio. This ratio, which measures the return on an investment relative to the risk taken, has gained attention in the discussion surrounding open-ended real estate funds.
Recently, the Investment Association (BVI) released a report on the performance of fund comparison groups over short and long periods. The report highlighted the impact of low volatility on the Sharpe ratio of open-ended real estate funds. With low volatility, the Sharpe ratio may increase, indicating a better risk-adjusted performance.
In 2025, global equity funds have shown a mixed but generally positive performance. Some top funds have delivered strong absolute returns, with the Ranmore Global Equity fund returning 18%, WS Blue Whale Growth 8.8%, and Lazard Global Equity Franchise 7.1% as of mid-year. However, across a broader sample, the IA Global equity sector returned only 2.75% year to date, reflecting short-term volatility and uneven recovery post-tariff tensions.
Interestingly, emerging market equity funds have outperformed both global and German equity funds over the past 20 years. Despite the lack of specific recent performance details for emerging market equity funds, market sentiment indicates more enthusiasm for Asia and European markets compared to the U.S. Following the reduction of tariff-related uncertainty, JPMorgan notes solid profit growth expected to continue into 2026 with more enthusiasm for markets in Asia, suggesting emerging markets may benefit from global trade normalization and economic recovery.
However, the performance of German equity funds was not explicitly mentioned in the search results.
In the context of open-ended real estate funds, the low volatility observed in these funds may positively affect the Sharpe ratio. This could make them an attractive option for investors seeking higher risk-adjusted returns.
It's important to note that this article does not discuss any specific changes in the Sharpe ratio of open-ended real estate funds. Nonetheless, the potential for improved risk-adjusted returns in these funds warrants further investigation for investors seeking to diversify their portfolios.
[1] AJ Bell, (2025). Global Equity Funds: Top 10 Funds of 2025 So Far. [Online] Available at: https://www.ajbell.co.uk/news/2025/global-equity-funds-top-10-funds-of-2025-so-far/
[2] Fidelity International, (2025). Milford Global Equity Fund. [Online] Available at: https://www.fidelity.com/funds/snapshot/MILFORD-GLOBAL-EQUITY-FUND
[3] Money Observer, (2025). Best Global Equity Funds. [Online] Available at: https://www.moneyobserver.com/investments/best-global-equity-funds/
[4] Money Observer, (2025). Global Equity Market Recovery. [Online] Available at: https://www.moneyobserver.com/investments/global-equity-market-recovery/
[5] Gresham House, (2025). Gresham House Global Equity Fund. [Online] Available at: https://www.greshamhouse.co.uk/our-investments/equities/gresham-house-global-equity-fund/
- For investors who are exploring different options for diversifying their portfolios, the low volatility in open-ended real estate funds and its potential impact on the Sharpe ratio should be considered as an attractive investment opportunity for better risk-adjusted returns.
- While the Sharpe ratio of open-ended real estate funds has not been discussed in terms of any specific changes, the possibility of improved risk-reward trade-offs in these funds makes it crucial for investors to further investigate this sector.
