publication . Preprint . 2011

The Relative Performance of Debt-restricted Real Estate Investment Trusts (REITs): Does Faith Matter?

M. Kabir Hassan; Yasser Alhenawi; Hesham Merdad;
Open Access
  • Published: 01 Jul 2011
Ibrahim & Ong (2008) use operational restrictions of Islamic Investment Guidelines and conduct a thought experiment on Real Estate Investment Trusts (REITs) under restricted and non-restricted schemes. We use financial restriction and reach somewhat different results. Compliant REITs underperform non-compliant REITs in equally-weighted portfolios. However, the results are inversed in value-weighted portfolios. In the latter case, compliant REITs outperform non-compliant REITs and provide a less volatile investment vehicle. More interestingly, during the recent financial crisis, compliant REITs generated higher gains in equally-weighted portfolios and lower losse...
free text keywords: Real Estate Investment Trusts, Ethical Investing, Carhart Four-Factor Model, jel:G12, jel:G20, jel:G23
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