HYPOTHETICAL HISTORICAL GROWTH OF $10,000 | 12.31.1977 – 9.30.2021
Source: Morningstar Direct. NPI is the National Council of Real Estate Investment Fiduciaries Property Index. You can not invest in an index. Index data does not reflect the deduction of fees and other expenses which would reduce returns. Past performance is not a guarantee of future returns.
ANNUAL TOTAL RETURN AND INCOME RETURN | 01.01.1978 – 12.31.2020
Source: Morningstar Direct. NPI is the National Council of Real Estate Investment Fiduciaries Property Index. You can not invest in an index. Index data does not reflect the deduction of fees and other expenses which would reduce returns. The Income Return measures that portion of total return attributable to each NPI property’s net operating income, or NOI. Net operating income is gross rental income plus any other income less operating expenses – utilities, maintenance, taxes, property management, insurance, etc. The NOI return is computed by dividing NOI by the average daily investment for each quarter. The formula takes into consideration any capital improvements and/or any partial sales that occurred during the quarter. Past performance is not a guarantee of future returns.
PERIODS ENDING | 9.30.2021
Source: Morningstar Direct from 10/01/2001-9/30/2021 periods ending September 30, 2021 | Stocks: S&P 500 | Bonds: Bloomberg U.S. Aggregate Bond Index | REITs: MSCI U.S. REIT Index | iPERE (Institutional Private Equity Real Estate) total return from the National Council of Real Estate Investment Fiduciaries Property Index (NPI). Asset returns are shown for informational purposes only. Comparison excludes one year period as there are insufficient data points to calculate quarterly standard deviation. You can not invest in an index. Index data does not reflect the deduction of fees and other expenses which would reduce returns. Past performance is not a guarantee of future returns.
Historically, real estate has performed above its long terms averages in inflationary and rising rate periods while investment grade bonds have performed below their long term average.
A rising interest rate environment is defined as quarters when the Effective Federal Funds Rate (FFR) increased 25 basis points or more; NCREIF Property Index (NPI) and 10-year US Treasury Bond Total Return (ICE BofA US Treasury 7-10 yr.) tallied, averaged and annualized for those quarters. Analysis since NPI inception (Jan 1978) through Dec 2020. A high inflation environment is defined as quarters when the Consumer Price Index (CPI) increased 100 basis points or more; NCREIF Property Index (NPI) and Bloomberg Aggregate Bond Index tallied, averaged and annualized for those quarters. Analysis since Bloomberg Aggregate Bond Index inception (Jan 1980) through Dec 2020. Past performance is not a guarantee of future returns.
MSCI US REIT Index (Public REITs): A free float-adjusted market capitalization weighted index comprised of equity REITs that are included in the MSCI US Investable Market 2500 Index, with the exception of specialty equity REITs that do not generate a majority of their revenue and income from real estate rental and leasing operations. The index represents approximately 85% of the US REIT universe (www.msci.com). Returns shown are for informational purposes and do not reflect those of the Fund. You cannot invest directly in an index and unmanaged indices do not reflect fees, expenses or sales charges. Risks include rising interest rates or other economic factors that may negatively affect the value of the underlying real estate.
Bloomberg U.S. Aggregate Bond Index: A broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency). Provided the necessary inclusion rules are met, US Aggregate eligible securities also contribute to the multi-currency Global Aggregate Index and the US Universal Index, which includes high yield and emerging markets debt. Risks include rising interest rates or other economic factors that may negatively affect the value of the underlying bonds.
S&P 500: An index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe (Investopedia).
Standard Deviation: The standard deviation of the daily percentage change in an investment. Standard deviation shows how much variation from the average exists with a larger number indicating the data points are more spread out over a larger range of values.
Sharpe Ratio: Measurement of the risk-adjusted performance. The annualized Sharpe ratio is calculated by subtracting the annualized risk-free rate – (3-month Treasury Bill) – from the annualized rate of return for a portfolio and dividing the result by the annualized standard deviation of the portfolio returns. You cannot invest directly in an index. Benchmark performance should not be considered reflective of Fund performance.
iPERE/NCREIF Property Index (NPI): Institutional private equity real estate (iPERE) can be described as high-quality commercial properties that are usually congregated in large investment portfolios managed professionally on behalf of third-party owners or beneficiaries. The leading benchmark index for iPERE is the National Council of Real Estate Investment Fiduciaries Price Index (NPI) which represents a collection of 9,700+ institutional properties representing all major commercial property types within the U.S. The NPI is a quarterly time series composite total rate of return measure of investment performance of a very large pool of individual commercial real estate properties acquired in the private market for investment purposes only. All properties in the NPI have been acquired, at least in part, on behalf of tax-exempt institutional investors – the great majority being pension funds. As such, all properties are held in a fiduciary environment.
Total Return: Expressed in percentage terms, Morningstar’s calculation of total return is determined by taking the change in price, reinvesting, if applicable, all income and capital gains distributions during the period, and dividing by the starting price. The NPI Total Return includes appreciation (or depreciation), realized capital gain (or loss) and income. It is computed by adding the Income return and Capital Appreciation return on a quarterly basis. Income Return measures the portion of total return attributable to each property’s net operating income or NOI. It is computed by dividing NOI by the average quarterly investment for the quarter. Capital Appreciation Return measures the change in market value adjusted for any capital improvements or partial sales for the quarter.
For current fund performance please visit bluerockfunds.com/performance. Past performance is not a guarantee of future returns.