From a small northwestern observatory…

Finance and economics generally focused on real estate

ACCRE Report, September, 2021

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Wow — the market was a real roller coaster in September, and continues so in October. The broader S&P 500 was down 4.76% last month, and ACCRE was also off but by only 2.19%. The S&P Real Estate index fell 4.83%, again showing the benefits from a carefully curated real estate fund rather than a blind, broad index. More telling, the S&P 500 daily returns showed a significant level of volatility in September, but ACCRE’s volatility (measured as standard deviation of daily returns) was about 25% less. Again, a well curated REIT portfolio goes a long way to attenuating volatility.

As shown above, a dollar invested in ACCRE at the inception outperformed the S&P for several years, but has underperformed in this year’s bull run. Naturally, we hope the bull market continues, but one of the principal strengths of ACCRE is to serve as a hedge in downturns. This past month was a case in point.

S&P 500
Average Daily Excess Return0.0480%
Standard Deviation (life of fund)1.2540%
Sharpe’s Ratio3.8241%
Average Daily Excess Return0.0368%
Standard Deviation (life of fund)1.1824%
Sharpe’s Ratio3.1129%
Correlation (life of fund)50.2975%
Correlation (month of September)25.9817%

As usual, if you have any questions about ACCRE or REITs in general, please don’t hesitate to reach out.

John A. Kilpatrick, Ph.D., MAI —

Written by johnkilpatrick

October 6, 2021 at 11:05 am

Posted in Uncategorized

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