Smoothing / hedging indexes; book5, pg 17 between, actually, index, part, comparing

tikfed

While comparing performance returns, there are comparisons between - NAREIT index ‘vs’ NAREIT index hedged;  NCREIF index ‘vs’ NCREIF index unsmoothed.
As part of smoothing/unsmoothing, what does they actually do? Similarly as part of hedging, what do they do, that gave new values of return, std. dev. and so?
TY.

RepoToronto

Instead of computing daily, weekly, monthly returns using market prices (which in many cases would be impossible to do), they estimate those prices.  If the portfolio value were, say, $1,000,000 on 2013/1/1 and $1,120,000 on 2013/12/31 (with no pricing in the interim), do you think it’s more likely that they’ll choose monthly values of $1,010,000, $1,020,000, … $1,110,000, or monthly values of $1,200,000, $990,000, … $1,400,000?  The latter will have a much larger standard deviation of monthly returns than the former.
What they actually do, in short, is guess.  And they probably bias their guesses toward lower return volatility than higher return volatility.

RealEstate_CFA

what is the unsmoothed NCREIF, it sounds like another word that rhymes with it.