We use a panel of investment-grade corporate bonds to investigate why credit spreads are so much larger than expected losses from default. We begin by confirming that systematic factors contribute very little to spreads, even if higher moments or downside effects are incorporated.

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.

A number of studies in the US have examined the optimum allocation of real estate in the mixed-asset portfolio and find that a large allocation to real estate can be justified.

There has been something of a debate about the thinking that prescribes the decisions to develop or invest in real estate in particular locations in the UK, and how this has continued to dictate the location of such investment.