ACM Residential Real Estate Fund
The ACM Residential Real Estate Fund (REF) is a professionally managed model portfolio designed to provide sophisticated investors with targeted, exclusive exposure to the U.S. residential real estate sector. By utilizing the REF model portfolio, investors gain diversified access to a broad spectrum of residential real estate assets, including mortgage-backed securities, single-family homes, rental properties, multifamily apartments — both coastal gateway and Sunbelt — manufactured housing communities, and residential land development across the United States.
Structured as a hedge fund-of-stocks-and-funds, the model REF portfolio is constructed using a blend of passively managed exchange-traded funds (ETFs), real estate investment trusts (REITs), and publicly traded homebuilder equities. The portfolio employs a balanced equal-weight strategic asset allocation that distributes capital equally across three complementary residential real estate segments: 33⅓% mortgage-backed securities (VMBS), 33⅓% equity REITs, and 33⅓% homebuilder and land developer stocks. This equal-weight structure ensures no single segment dominates performance attribution and provides maximum diversification across the entire residential housing value chain — from land acquisition and financing through construction, ownership, and occupancy. This allocation is enhanced by a tactical asset allocation overlay, which facilitates periodic rebalancing to optimize risk-adjusted returns in response to evolving market conditions.
The combination of strategic and tactical asset allocation, the fund-of-stocks-and-funds structure, high-quality underlying investments, and a dynamic hedging strategy is designed to deliver the risk-managed performance expected by investors over a suitable investment horizon.
This hedge fund is appropriate for sophisticated investors that want tailored, comprehensive, and equal-weight exposure to the full performance spectrum of the U.S. residential housing market — from mortgage financing (VMBS) through property ownership (REITs) to new construction (homebuilders). The equal-weight allocation across all three segments — MBS, REITs, and Homebuilders & Land — spans the full residential real estate value chain: from government-backed mortgage financing (VMBS) through manufactured housing and apartment ownership (SUI, EQR, AMH, MAA) to homebuilding and pure-play residential land development (DHI, PHM, TOL, FOR). The inclusion of Sun Communities and Forestar Group makes this portfolio uniquely comprehensive among all publicly available residential real estate vehicles.
Institutional allocators evaluating this fund should measure its performance against a risk-adjusted residential real estate benchmark, not against pure-equity REIT indices. The 33.33% VMBS allocation intentionally reduces equity beta in exchange for yield stability, government-backed credit quality, and defensive characteristics during housing market corrections — this is the defining attribute of a hedge fund structure. The mandate here is to optimize the Sharpe ratio of residential real estate exposure across the full market cycle, not to maximize raw return in bull markets. Investors seeking maximum upside in residential equity bull markets can find that exposure elsewhere at lower cost. Investors seeking professionally managed, risk-controlled, full-cycle residential real estate exposure — with institutional-grade portfolio construction, transparent attribution analysis, no lock-up period, and a fee rebate policy — will find no comparable product in the public markets.
For investors with $1 million+ USD: ACM offers a flexible structure wherein investors establish an account with a brokerage firm of their choice and grant ACM discretionary trading authority to replicate the REF model portfolio. Investors retain exclusive control over deposits and withdrawals, while the brokerage firm provides custody, recordkeeping, compliance, and IRS reporting.
For investors with $50 million+ USD: ACM establishes separately managed accounts (SMAs) held in trust with an independent custodial banking institution selected by the investor. In this structure, ACM assumes full responsibility for investment management, front-office functions, and back-office administration.
Portfolio Insurance Strategy
The REF model incorporates a dynamic portfolio insurance strategy based on a disciplined hedging framework designed to mitigate downside risk while preserving upside potential over a defined investment horizon. When the hedging strategy is active, the value of the Fund's long put option positions and its underlying securities may move in opposite directions; however, the portfolio maintains a consistently positive net delta. Under the hedging protocol, investment risk is effectively limited to the difference between the underlying security prices and the put option strike prices, adjusted for option premiums and transaction costs.
Employed when short-term residential real estate market sentiment is bearish, but long-term fundamentals remain constructive, to protect equity positions against anticipated adverse movements before they occur.
Utilized to mitigate prepayment and extension risks within the fixed income segment, recognizing the lagged effect of macroeconomic data on mortgage-backed securities. The Fund does not hedge against default risk — underlying MBS carry explicit or implicit U.S. government guarantees.
Estimated annual hedging cost against 10% losses: $96,600 (9.66% of $1M AUM). Complete portfolio insurance is cost-prohibitive. ACM implements hedging only when macro and valuation metrics merit the action, for durations under one quarter.
Allocation & Holdings
The ACM REF is a fund-of-stocks-and-funds portfolio structured on an equal-weight allocation across three residential real estate segments: 33⅓% Mortgage-Backed Securities, 33⅓% Equity REITs, and 33⅓% Homebuilder & Land Securities. This balanced architecture reflects the conviction that superior long-term risk-adjusted returns are achieved through equal participation across the entire residential housing value chain. The MBS segment (VMBS) provides yield stability and government-backed principal protection; the REIT segment (EQR, AMH, MAA, SUI) delivers dividend income and property appreciation across coastal apartments (EQR), single-family rentals (AMH), Sun Belt apartments (MAA), and manufactured housing communities (SUI); the homebuilder and land segment (DHI, PHM, TOL, FOR) captures cyclical growth and, uniquely through Forestar Group, pure-play residential land development unavailable in any other fund structure. The equal-weight structure requires periodic rebalancing, which systematically enforces a buy-low/sell-high discipline across segments.
The 33.33% agency MBS position serves three simultaneous functions within this portfolio. First, it provides a current income stream through coupon distributions regardless of equity market conditions. Second, it acts as a structural hedge against the equity volatility inherent in REITs and homebuilder stocks — precisely when those segments suffer their deepest drawdowns, agency MBS benefits from a flight-to-quality bid and government backing that insulates principal. Third, and most importantly, it preserves the fund's exclusive residential real estate mandate: VMBS holds securities whose performance is directly determined by mortgage origination volumes, prepayment speeds, and housing finance conditions. Unlike a traditional 60/40 portfolio where the bond allocation has no thematic relationship to the equity allocation, the VMBS position here is economically linked to the same residential housing market driving the equity holdings — it is residential real estate fixed income, not a generic interest rate hedge. This thematic coherence is what distinguishes the ACM REF from a simple blended portfolio and justifies its classification as a dedicated residential real estate hedge fund.
Growth of $1,000 — 2010 Through 2025
Hypothetical growth of a $1,000 investment in the ACM REF model portfolio versus the 60/40 benchmark (40% VMBS + 30% REZ + 30% XHB) from January 2010 through December 2025. Based on actual ETF annual total returns with dividends reinvested — all three benchmark components have live price data from 2010 onward, so no index proxies are required. The 16-year window captures the post-financial-crisis recovery, the 2022 interest rate shock, and the post-COVID housing boom, providing a complete picture of the portfolio's behavior across multiple distinct rate and housing market cycles.
Calendar Year Performance
Annual total returns for the ACM REF model portfolio (33.33% MBS / 33.33% REITs / 33.33% Builders & Land) versus the 60/40 benchmark (40% VMBS + 30% REZ + 30% XHB), 2010–2025. Based on actual ETF and security annual total returns with dividends reinvested. The fund's equal-weight structure tends to outperform in balanced market environments and exhibit moderate volatility relative to a pure-equity residential real estate portfolio.
| Year | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ACM REF | +23.3% | +3.9% | +36.8% | +19.7% | +12.6% | +5.8% | +14.9% | +30.8% | -8.0% | +45.8% | +19.6% | +35.5% | -22.7% | +26.3% | +12.4% | -0.1% |
| Benchmark | +22.8% | +3.7% | +35.0% | +17.3% | +12.5% | +10.4% | +10.3% | +26.4% | -10.7% | +42.3% | +16.2% | +31.5% | -23.0% | +23.5% | +10.9% | -0.1% |
| Alpha | +0.5% | +0.2% | +1.8% | +2.4% | +0.0% | -4.6% | +4.6% | +4.5% | +2.7% | +3.5% | +3.4% | +4.0% | +0.2% | +2.9% | +1.6% | 0.0% |
* Pre-inception data (2010–2019) uses actual annual returns for all securities. Fund inception: July 2020. All benchmark ETFs (VMBS, REZ, XHB) have live price data from 2010 onward — no index proxies. FOR pre-2017 reflects diversified real estate & natural resources operations prior to DR Horton acquisition.
Rolling Return Analysis
Rolling annualized performance charts show how the portfolio return has evolved over successive periods. Each data point represents the annualized return for the trailing window ending in that year. Charts cover 2020–2025 to focus on the fund's active period.
Each bar shows the annual total return for that calendar year.
Each bar shows the annualized return for the 3-year period ending in that year.
Each bar shows the annualized return for the 5-year period ending in that year.
Attribution Analysis — As of 2026-03
The following analysis decomposes ACM REF performance relative to the 60/40 benchmark (40% VMBS / 30% REZ / 30% XHB) using the Brinson-Hood-Beebower framework. Security Selection measures value added by choosing specific securities within each asset class versus the class benchmark index: (Security Return − Benchmark Class Return) × Portfolio Weight. Asset Allocation measures the impact of over/underweighting each asset class: (Portfolio Weight − Benchmark Weight) × (Benchmark Class Return − Fund Return). All returns are annualized over the stated period and computed from live monthly price data.
| Security | Security Return (A) |
Benchmark Return (B) |
A−B | Port. Wt (D) |
Selection (A−B)×D |
|---|---|---|---|---|---|
| Mortgage-Backed Securities | |||||
| Vanguard Mortgage-Backed Securities ETF (VMBS) | +4.83% | +4.83% | +0.00% | 33.33% | +0.00% |
| Mortgage-Backed Securities Subtotal | 33.3% | +0.00% | |||
| Equity REITs | |||||
| Equity Residential (EQR) | -16.20% | -3.02% | -13.19% | 8.33% | -1.10% |
| American Homes 4 Rent (AMH) | -20.66% | -3.02% | -17.64% | 8.33% | -1.47% |
| Mid-America Apartment Communities (MAA) | -23.49% | -3.02% | -20.48% | 8.33% | -1.71% |
| Sun Communities (SUI) | -1.49% | -3.02% | +1.52% | 8.33% | +0.13% |
| Equity REITs Subtotal | 33.3% | -4.15% | |||
| Homebuilder & Land Securities | |||||
| DR Horton (DHI) | +6.80% | -3.49% | +10.29% | 8.33% | +0.86% |
| Pulte Group (PHM) | +11.13% | -3.49% | +14.62% | 8.33% | +1.22% |
| Toll Brothers (TOL) | +16.92% | -3.49% | +20.41% | 8.33% | +1.70% |
| Forestar Group (FOR) | +11.50% | -3.49% | +14.99% | 8.33% | +1.25% |
| Homebuilder & Land Securities Subtotal | 33.3% | +5.03% | |||
| Total Security Selection | +0.88% | ||||
| Security | Port. Wt (A) |
Bench. Wt (B) |
A−B (C) | Class Bench (D) |
Fund Ret (E) |
D−E (F) | Alloc C×F |
|---|---|---|---|---|---|---|---|
| Mortgage-Backed Securities | |||||||
| Vanguard Mortgage-Backed Securities ETF (VMBS) | 33.33% | 40.00% | -6.67% | +4.83% | +0.32% | +4.51% | -0.30% |
| Mortgage-Backed Securities Subtotal | -0.30% | ||||||
| Equity REITs | |||||||
| Equity Residential (EQR) | 8.33% | 7.50% | +0.83% | -3.02% | +0.32% | -3.33% | -0.03% |
| American Homes 4 Rent (AMH) | 8.33% | 7.50% | +0.83% | -3.02% | +0.32% | -3.33% | -0.03% |
| Mid-America Apartment Communities (MAA) | 8.33% | 7.50% | +0.83% | -3.02% | +0.32% | -3.33% | -0.03% |
| Sun Communities (SUI) | 8.33% | 7.50% | +0.83% | -3.02% | +0.32% | -3.33% | -0.03% |
| Equity REITs Subtotal | -0.11% | ||||||
| Homebuilder & Land Securities | |||||||
| DR Horton (DHI) | 8.33% | 7.50% | +0.83% | -3.49% | +0.32% | -3.81% | -0.03% |
| Pulte Group (PHM) | 8.33% | 7.50% | +0.83% | -3.49% | +0.32% | -3.81% | -0.03% |
| Toll Brothers (TOL) | 8.33% | 7.50% | +0.83% | -3.49% | +0.32% | -3.81% | -0.03% |
| Forestar Group (FOR) | 8.33% | 7.50% | +0.83% | -3.49% | +0.32% | -3.81% | -0.03% |
| Homebuilder & Land Securities Subtotal | -0.13% | ||||||
| Total Asset Allocation | -0.54% | ||||||
Security Selection = (Security Return − Benchmark Class Return) × Portfolio Weight. Asset Allocation = (Portfolio Weight − Benchmark Weight) × (Benchmark Class Return − Fund Return). Benchmark class returns: MBS = VMBS, REITs = REZ, Builders & Land = XHB. Benchmark weights: VMBS 40%, REZ 30%, XHB 30%. Per-holding benchmark weight = class weight ÷ number of holdings in class. Data: Yahoo Finance monthly adjusted closes.
Risk Statistics Since Inception
About Troy Morris Adkins II
Troy Morris Adkins II is the founder and portfolio manager of Adkins Capital Management LLC, with exclusive focus on the U.S. residential real estate industry. As a thought leader and progressive hedge fund investment manager, Troy has committed to providing investors with transparent operations, comprehensive investment exposure exclusive to the residential housing industry, fully disclosed investment guidelines and performance, liquid holdings with no lock-up period, and a fee rebate policy that returns ACM's management fee in full for any calendar year in which the model REF Fund delivers a negative return.
Troy routinely conducts a copious level of qualitative and quantitative due diligence on every security in the model REF Fund and periodically conducts research across the broader residential real estate universe to determine if any portfolio changes would enhance the risk-return profile of the fund. ACM also provides analytical services to prospective home buyers, housing educational services, sell-side investment management research to institutional asset management firms, and consultancy services to federal government agencies.
- Transparent operations and fully disclosed holdings
- No lock-up period — complete liquidity at all times
- Fee rebate if calendar-year return is negative (0.25% ACM fee)
- Competitive, transparent fee structure with prepaid annual invoice
- Exclusive, comprehensive residential real estate market exposure
- Clearly defined and controlled investment risks
- Dynamic hedging to protect against material downside events
The ACM Residential Real Estate Fund (REF) is a simulated model portfolio and does not represent an actual investment fund. All performance data shown is hypothetical and based on historical market prices with dividends reinvested. Growth of $1,000 chart covers 2010–2025 using actual ETF annual returns throughout; no index proxies are used. Pre-inception data (2010–June 2020) reflects actual historical security returns but does not represent actual fund performance. Simulated results have inherent limitations and do not reflect actual trading, liquidity constraints, bid-ask spreads, or the full impact of fees and taxes.
The ACM REF employs an equal-weight allocation of 33.33% across three segments: Mortgage-Backed Securities (VMBS 33.33%), Equity REITs (EQR, AMH, MAA, SUI — 8.333% each), and Homebuilder & Land Securities (DHI, PHM, TOL, FOR — 8.333% each). American Campus Communities (ACC, taken private Aug 2022) has been replaced by Mid-America Apartment Communities (MAA), the largest Sunbelt/Southeast apartment REIT, providing a full 2000–2025 return history. UMH Properties has been replaced by Sun Communities (SUI). Forestar Group (FOR) has been added as the only publicly traded pure-play residential land developer. Benchmark: 40% VMBS + 30% REZ + 30% XHB (60% equity / 40% fixed income).
Past performance is not indicative of future results. This information is provided for educational purposes only and does not constitute an offer or solicitation to buy or sell any securities. Investing involves risk, including the possible loss of principal. ACM Expense Ratio: 0.25% per annum. Underlying expense ratios: <0.76%. The ACM management fee will be rebated in full for any calendar year in which the model REF Fund delivers a negative return.
©2020 Adkins Capital Management LLC. All rights reserved. Data refreshed every 24 hours. Last updated: March 29, 2026 at 6:38 AM GMT+0000 • Live data source: Yahoo Finance.