|29th IBIMA Conference
3 - 4 May 2017
Performance Analysis of Malaysia’s Open-Ended Real Estate Fund
Choo Chee Khang, Hishamuddin Mohd. Ali, Muhammad Najib Razali and Sabariah Eni,
The growth of the open-ended real estate fund over the last several years has heightened the interest in property investment. . In recent year, the performance of the funds growth due to global economic prospects, improve condition in the capital market and REITs market may be well positioned. Open-ended real estate funds’ performance also placed at the highest rank in the FundMarket Insight Report 2012. However, there is still lack of the studies of open-ended real estate funds in Malaysia. This paper aims to identify the factors driving the performance of open-ended real estate funds in Malaysia and to analyze the interaction of open-ended real estate funds with the capital market over a 5-year period across 10 open-ended real estate funds. Influential factors tested in the analysis include fund size, yield, gearing and net asset value per share. All the factors show positive relationship with the total rate of return except net asset value per share and yield has negative relationship with the return of the funds. The interaction of open-ended real estate funds were then analyze with the capital market such as Dow Jones Industrial Average and FTSE Bursa Malaysia KLCI, FTSE EPRA/NAREIT Developed Asia 33, FTSE EPRA/NAREIT Hong Kong REITs Index, FTSE EPRA/NAREIT Singapore REITs Index, MSCI World Real Estate Index and GPR 250 REIT Index are significant as predictors of the fund performance. The result shows that all the capital markets are positive impact to the total rate of return except Dow Jones Industrial Average, FTSE EPRA/NAREIT Developed Asia 33 and FTSE EPRA/NAREIT Singapore REITs Index. Therefore, open-ended real estate funds provide the potential of indirect real estate investment in Malaysia.