Archive for November 18th, 2020
ACCRE Mid-Month Report
It’s been a mixed-bag for REITs this month. While many sectors continue to lag, short positions can be dangerous. The market is hungry for good news, and leaps at anything tossed in the water. Case in point, we saw one REIT with terrible earnings projections, but the market price rebounded when Funds from Operations (FFO) came in “less bad” than previously forecasted. Another REIT has a spread of analysts targets of over 100% from bottom to top, proving that optimism has a home in the real estate sector.
This month, I’m going to provide both LAST month’s stats on ACCRE as well as this month, just to show what a difference a month makes:
| September, 2020 | October 2020 | |
| S&P 500 | ||
| Average Daily Excess Return | 0.0327% | 0.0290% |
| Standard Deviation | 1.3451% | 1.3429% |
| Sharpe Ratio | 2.4315% | 2.1576% |
| ACCRE Fund | ||
| Average Daily Excess Return | 0.0455% | 0.0426% |
| Standard Deviation | 1.1540% | 1.1520% |
| Sharpe Ratio | 3.9436% | 3.6984% |
| Correlation (overall) | 56.4666% | 55.8996% |
| Correlation (monthly) | 73.4120% | 57.0514% |
ACCRE continues to out perform the S&P, both on an unadjusted (Average Daily Excess Returns) and a risk-adjusted (Sharpe Ratio) basis, the correlation between ACCRE and the S&P really whip-sawed in October. In the previous month, we had a very tight correlation (73%) which is actually higher than we want it. A correlation in the 50’s serves our two-pronged goal of outperforming the benchmarks in the long run and providing diversification for a mixed portfolio.
Our private newsletter subscribers received some trade alerts today, and there will probably be more soon. This market has a great deal of volatility, as well as election-year and end-of-year roiling. We avoid run-and-gun trading (REITs really don’t day-trade well!) but the market we see right now requires some close inspection.
As always, if you have any questions or comments, please let me know.
John A. Kilpatrick, Ph.D. — john@greenfieldadvisors.com
From a small northwestern observatory... 