Mid Month Bragging

I really do hate to brag, but when the rest of the market is roiling like it is right now, investors clamor for security.  A well-curated REIT portfolio fits the bill nicely.  As such, the S&P closed on July 31 at 2980.38, and closed today at 2874.60, a drop of about 3.5%.  ACCRE, on the other hand, is up 1.59% on the month.  Indeed, every long position we have was up today, and our short position was slightly down.  Go figure….

By the way, a dollar invested in ACCRE at the inception (April 1, 2017) is now worth slightly over $1.60.  You’re welcome.

ACCRE: Another solid month

ACCRE was positive again in July, and (not surprisingly) turned in significantly better numbers than the S&P.  Specifically, ACCRE showed a 2.16% return for the month compared to 1.31% for the S&P.  (NAREIT statistics are not yet in.)  Overall, a dollar invested in ACCRE at the inception would be worth $1.58 today, compared to $1.26 for that same dollar invested in the S&P.

Dollar Invested 7 31 19

Part of the success of ACCRE is its lack of correlation with the S&P.  Overall, since the inception, ACCRE and the S&P only have a 42.2% correlation.  Hence, ACCRE enjoys stability in times of volatility, and thus adds diversification to a stock portfolio.  For the month of July alone, the correlation fell to 29.5%.  Hence, the significant swings in the overall stock market were mostly unfelt at ACCRE.

Subscribers will receive a more in-depth snapshot later this weekend.  We’ve recently added some holdings to our portfolio, and will probably re-align some holdings as August progresses.  Best wishes for a great weekend!

 

ACCRE Trade Alert

We’ve held a fairly static portfolio for the past few months, but are now repositioning in several sectors.  We made after-market trades last evening.  Note that ACCRE premium subscribers have access to these trades, the reason for the trades, and the current portfolio position.

ACCRE report for June, 2019

It was another solid month for ACCRE, up a solid 2.23%. We outperformed REITs in general (up 1.63%) by a tidy margin.  The S&P did much better (up 6.89% for the month), but then again, it had to catch up from a dismal May (when it was down 6.58%).  All in all, a dollar invested in ACCRE since the inception would be worth $1.54 today, compared to $1.25 if invested in the S&P.

June 2019dollar invested

The Sharpe Ratio continues to be stellar.  As readers will recall, this is the ratio of the fund’s excess returns (average daily return minus the return on the 13-week T-Bill) divided by the standard deviation of those excess returns.  A higher Sharpe Ratio says we’re getting more return for the risk we take (volatility).  As of the end of June, our cumulative Sharpe ratio was 6.2%, compared to 2.9% for the S&P.  This means that on a risk-adjusted basis, ACCRE is providing over twice the return as the S&P.  Of course, this is apparent from the raw data as well.

By the way, the cumulative correlation between ACCRE and the S&P is 42.4% (slightly down from May), which reminds us that ACCRE does a great job of providing diversification in a market portfolio.

REITs, the Environment, Sustainability, and Governance

I’m pleased to report that NAREIT has released its first ever Environment, Sustainability, and Governance (ESG) report this month.  For many years, REITs have been concerned about their environmental footprints, and have been at the lead in reducing energy consumption and waste.  However, REITs and the leadership at NAREIT want to go beyond that, and are now promoting best practices in these three key areas.  This month’s report — hopefully the first in a series — synopsizes how well we are doing.

Of course, doing “good” can also mean doing “well”, and REITs are still committed to offering solid diversified returns and liquidity to investors.  We here at ACCRE are committed to being good citizens of the world around us, so it is useful that as we look for great REIT investments, we can also make sure we are owing a piece of firms that are “doing good”.

What exactly constitutes positive practices in ESG?  For example,  the report documents REIT performance in a number of key areas, including (but not limited to):

Green Building Certification
Emission Reductions
Decreased Energy Consumption
Energy Efficiency
Waste Reduction
Water Conservation
Creating Lasting Social Impact
Focus on surrounding Communities
Investing in Employee Development and Wellbeing
Robust Governance & Board Diversity
Supply Chain Management

In all of these areas, REITs appear to be taking the lead in the real estate sector.  Of course, there is always more work to do, and it’s great to know that NAREIT is prioritizing good citizenship among its members.  For your own copy of the report, click here.