THE PERFORMANCE AND SIGNIFICANCE OF ISLAMIC REITs IN A MIXED-ASSET PORTFOLIO

2015 ◽  
Vol 77 (26) ◽  
Author(s):  
Ahmad Tajjudin Rozman ◽  
Nurul Afiqah Azmi ◽  
Hishamuddin Mohd. Ali ◽  
Muhammad Najib Mohamed Razali
Keyword(s):  
Performance Analysis ◽  
Real Estate ◽  
Correlation Analysis ◽  
Capital Market ◽  
Real Estate Investment Trusts ◽  
Real Estate Investment ◽  
Low Correlation ◽  
Time Period ◽  
Asset Portfolio ◽  
Asset Class

Islamic Real Estate Investment Trusts (I-REITs) have been established to enhance the Islamic Capital Market. Almost 10 years of establishment of I-REITs, it is interesting to study the performance of this Islamic property investment vehicle because it is a potential and unique asset class that not fully explored. This paper examines the risk-adjusted performance analysis and correlation analysis between I-REITs in a mixed asset portfolio. The time period of study is from November 2008 to December 2014. I-REITs were compare in a mixed asset portfolio consists of shares and bonds. The results show that I-REITs outperform both shares market and bonds market. While I-REITs give high diversification benefits for the share and bond investors with low correlation between I-REITs, shares and bonds.

A review of efficiency measures for REITS and their specific application for Malaysian Islamic REITS

2017 ◽  
Vol 8 (1) ◽  
pp. 41-53 ◽  
Author(s):  
Nor Nazihah Chuweni ◽  
Chris Eves
Keyword(s):  
Performance Analysis ◽  
Real Estate ◽  
Conceptual Model ◽  
Empirical Research ◽  
Real Estate Investment Trusts ◽  
Efficiency Measurement ◽  
Efficiency Measure ◽  
Real Estate Investment ◽  
Content Type ◽  
Investment Trusts

Purpose This paper aims to present a conceptual model on the efficiency of Islamic real estate investment trusts (I-REITs) available in Malaysia. The key difference between the Islamic and their conventional investment vehicle part is mainly its own Shariah framework. For instance, I-REITS must comply with the requirement of Securities Commission Act 1993 as well as the Guidelines on Islamic Real Estate Investment Trusts (Islamic REITs Guidelines). Design/methodology/approach The paper reviews and synthesises the relevant literature on the performance analysis and efficiency measurements of REITs. The paper then develops and proposes a conceptual model to measure the efficiency of Malaysian and Islamic REITs. Findings The paper identifies and examines the appropriate methods and instruments to measure the efficiency in relation to the risk and profitability of I-REITs. The efficiency measure is important for the fund managers to maximise the shareholders’ return in an investment of property portfolio as well as proposing the best way to allocate resources efficiently. Research limitations/implications This is a preliminary review of current work that identifies the issues that will be addressed in future empirical research. The authors will be undertaking this future empirical research in measuring the efficiency of Malaysian real estate investment trusts (M-REITs), particularly the I-REITs, using the non-parametric approach of data envelopment analysis. Originality/value To date, there has been very limited research on the efficiency measurement of I-REITs. The current analysis of REIT has been focused on traditional non-Islamic funds. This paper will review and discuss the current literature on efficiency measurement to determine the most appropriate approaches and methodologies for future application in performance analysis of efficiency measure for Malaysian and Islamic REITs.

scholarly journals Surprising Comparison Of Risk And Return Factors Between Real Estate Investment Trusts (REITs) And The S&P 500 Index During The 2000-2011 Time Period

2013 ◽  
Vol 12 (1) ◽  
pp. 47 ◽  
Author(s):  
Brian D. Fitzpatrick ◽  
Shahid Ali ◽  
Garrett Wiegele
Keyword(s):  
Real Estate ◽  
Stock Returns ◽  
Late Summer ◽  
Real Estate Investment Trusts ◽  
Real Estate Investment ◽  
Risk And Return ◽  
The Real ◽  
Investment Trusts ◽  
Time Period ◽  
Short Period

<p>We composed and contrasted stock returns for large capitalized companies (S&amp;P 500) with returns of real estate investment trusts using the Financial Times equity, mortgage and composite indexes. The time period which was chosen was 2000 through 2011. This period is significant because up until the crash of 2008, the real estate bubble was forming. Major real estate problems were already in force in 2007, but serious deflation really did not fully commence until the stock market crash in the late summer and early fall of 2008. With such heavy doses of deflation, one would think real estate was doomed. We found that average returns for the S&amp;P 500 during this time period was 2.44% vs. a 13.73% average return for the composite Real Estate Investment Trusts (REIT) index. We calculated the geometric returns of .0054% for the S&amp;P 500 vs. 11.21% for the composite REIT. This geometric return calculation was necessary because of many negative returns over a short period of time. The real surprise came when we risk adjusted our numbers using coefficients of variation. Using average returns, we found that the S&amp;P 500 took 7.9959 units of risk for each unit of return, while the composite REIT composite only took 1.6497 units of risk per return. Even the SE Mortgage index only took 2.4914 units of risk per unit of return, while the Equity REIT index took on 1.5744 units of risk per return. Utilizing geometric returns or compounded rates of return, we found a coefficient of variation (CV) of 9.755 for the S&amp;P 500, where the composite REIT experienced a 2.0205 CV and the FTSE Mortgage index showed a 4.0023 CV. Even though mortgage REITs took a greater hit than equity REITs, we still found a favorable relationship of risk and return vs. investment in common stocks. Money managers, who were properly diversified, rode out the financial storm much more comfortably with REITs as part of their diversification parameters.</p>

Real Estate Investment Trusts in Mexico

2020 ◽  
Author(s):  
PhD Aurora M. Poó ◽  
Luis Rocha Chíu ◽  
Víctor Lara Poó
Keyword(s):  
Real Estate ◽  
Real Estate Investment Trusts ◽  
Real Estate Investment ◽  
Investment Trusts
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