Open-End Real Estate Funds (OEREFs) have become a major investment vehicle,
offering an attractive risk-return ratio and providing an excellent portfolio diversification
opportunity for investors. Nevertheless, as for all financial products, the performance of
OEREFs is influenced by the market environment. As the market changes, OEREFs may
use various tools to adapt effectively, such as adjusting fund performance drivers.
Therefore, the paper investigates on the research question on how selected
macroeconomic variables, namely GDP growth, interest rate and inflation rate influence
chosen fund performance drivers, namely leverage ratio, liquidity ratio and fund flow of
OEREFs. After a comprehensive literature review, a quantitative study using panel data
regression models was conducted. The dataset contains a total of 99 observations from
nine German OEREFs over an eleven-year period from 2012 to 2022. To summarize the
statistically significant results, it was found that the leverage ratio has a positive
relationship with the interest rate and GDP growth and a negative relationship with the
inflation rate. Furthermore, it was detected that a rise in the inflation rate negatively
influences the liquidity ratio of OEREFs. The third regression has revealed a negative
effect of a rise in the interest rate on fund flows. Nevertheless, the findings underly certain
limitations, including a limited number of funds, set of variables and timeframe. Despite
the limitations of this paper, the study opens new fields of research which could improve
the validity and reliability of the findings. Overall, the study gives reveals several
outcomes that can be seen as practical recommendations for all market participants.
