So-far, so good for the month. ACCRE is up about 1.5% as of today, compared to about 0.8% for the S&P. That’s the sort of performance we like to report every month.
Mid-month is usually the time we talk about the Sharpe Ratio and other correlation statistics. As faithful readers know, a well-curated portfolio of real estate is not only a great investment, but also provides diversification. One way we measure this is with the Sharpe Ratio, which indicates the excess return (return over and above what we would have earned in T-Bills) adjusted for risk (measured by portfolio standard deviation). A higher Sharpe Ratio means we’re doing well after accounting for risk.
ACCRE’s Sharpe Ratio consistently beats the S&P, in no small part because ACCRE has far less volatility. September was no exception. ACCRE’s Sharpe Ratio was 0.06% (that’s daily excess return) compared to the S&P’s 0.02%. In other words, we’re beating the S&P by three times on a risk-adjusted basis.
One other important point — the correlation coefficient stands at 42.43% as of the end of September. This means that overall, ACCRE provides a very high degree of diversification in a broad securities portfolio.
As always, subscribers are provided monthly updates on the actual components of the ACCRE portfolio, as well as e-mail alerts when we make a trade.