sticky Wrote: > this is exactly where my question is coming from. > > “when the firm carves-out the real estate portion > of the portfolio, the GIPS CARVE-OUT provisions > (see II.3.A.7) MUST also be applied” > > but the thing is that 3A7 bans you from carving > out this real estate portion, since the cash > within this “balanced portfolio” is pooled between > equity, bond and RE. > > Thoughts? I don’t see my question answered. anyone? You CANNOT carve out RE according to 3A7. How are u presenting the performance of the “balanced portfolio”? Using general GIPS or RE GIPS? For more background, please refer to earlier posts. Thanks.
bigwilly Wrote: ------------------------------------------------------- > Yes you can have a balanced composite. I would go > with General Provision, but I would value the Real > Estate portion in accordance witht he Real Estaet > provision I agree with this The only q left is how your are going to calculate the return of composite: there will be monthly daily-weighted returns for equity/bonds and quarterly total returns for RE… Are you sure RE is not from REIT ?
comp_sci_kid Wrote: ------------------------------------------------------- > for all our schweser users: RE MUST BE VALUED BY > EXTERNAL VALUATOR ATLEAST EVERY 36 MONHTS. > > Schweser missed this somehow this time we cant blame schweser, ! book 5 p203, ‘real estate assets must be valued by an outside trained professional at least every three years’
Usually Real Estate investments earn “rent” or their “lease” from your tenants occupying a building/suite/house etc. That is used as income so if you receive 1,200/month from a tenant that is leasing your $100,000 building then 1200/100000 = 1.2%. Most people don’t buy RE and just let it sit there as your losing money “Opportunity costs”.
bigwilly, I agree on monthly “income” return, but in this case your data will be volatile 2 months returns will be only “income” part every 3rd month return will be “income”+“capital” Is it OK to sum these wih the rest?
yeah, but just because its valued quarterly doesnt mean the value will change…the value could remain stable…