A Study on the Investment of M-REITS among Malaysian Investors

Tan, Chor Heng (2021) A Study on the Investment of M-REITS among Malaysian Investors. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

In the models of making modern investing decision, the investment managers are required to adopt at least four elements in the development of investment plans and strategies, which includes goals, time horizon, financial stability, and risk tolerance (Grable 1997). Due to many investors perceive M-REITs as a new investment vehicle and as a diversification tool in their portfolio, there is a necessity in providing the investors an evidence as to whether an M-REIT investment is a good choice of investment, as well as whether these portfolios would have distinctive return and risk performance reflecting the stated risk and return underlying the investment vision. This study reveals the three main risk strategies adopted by investors were Aggressive, Balanced and Defensive Strategy, which the adopt of these strategies were based on the risk characteristics of the investors. Most of the Malaysian investors were adopting the Balanced Strategy. In the computation of risk-adjusted returns, PAVREIT, SUNREIT and IGBREIT were amongst the best performers within the M-REIT industry; while in the computation of risk/return ratio, SUNREIT, ALAQAR and PAVREIT were amongst the top performers compared to its peers. On the macroeconomic variables, the study reveals that interest rate, inflation rate and stock price index were the main factors influencing the REIT performance. Adopting quantitative approaches, this study analysed the performance of each M-REIT listed on Bursa Malaysia, as well as the investment of M-REITs among the Malaysian investors. The result reveals that most investors were drawn to the attractive dividend yield offered by REITs, and the top choice of M-REIT investment among aggressive investors is HEKTAR; while the top M-REIT investment by investors adopting balanced strategy is KIPREIT; and SUNREIT being the top M-REIT investment among defensive investors. These findings will benefit investors by guiding their investment decision making in constructing their investment portfolios and also in deciding ways to achieve diversification.