Editor's Note: Below is a brief excerpt from today's Early Look written by Macro analyst Ben Ryan. Click here to learn more.

On one hand, prospectively rotating into REITs specifically fits our macro playbook heading into the quarter (and STILL does). #HaveRatesPeaked is one of our Q3 "Macro Themes," and when we rolled out the deck on 6/28, REITs (VNQ is one vehicle) were smack dab in the middle of our investment conclusions page. On the other hand, the sector has had quite a run over the last 3 months, particularly if you care about volatility-adjusted performance...

...When looking at sector dispersion among S&P 500 sectors we look at the Vanguard Real-Estate REIT ETF (VNQ) in place of the SPDR Real Estate ETF (XLRE). VNQ has more history and deeper markets…VNQ is a +474bps total return outperformer against SPY in the last 3 months, and relative performance has been particularly good on a volatility adjusted basis which is an important complement to last price in our process. 

CHART OF THE DAY: Volatility-Adjusted Performance - 08.22.18 EL Chart

CHART OF THE DAY: Volatility-Adjusted Performance - early look