Building Solid Foundation for Property Fund Investments
Fairy tales can often embody kernels of truth and lessons for the learning, as implied in the tale of the three little pigs who invested in mud, straw and bricks. Two lost their deposits, but were bailed out by the third and more prudent investment. Proof, if any were needed, that it pays to diversify.
We have looked under the floorboards to evaluate non-physical options for diversification into property investment sectors. Today let’s look at property “boutique portfolios” using an MAP structure for maximum wealth creation.
Portfolio boutiques are ideal for co-ordinating investment styles to match. Individuals and investments both look better, and benefit more from tailor-fitted solutions. Equally, investments can become white elephants and begin to lose money if not readjusted and balanced in tune with ever-changing trends.
When investing in property assets, it’s also important to create balance and diversity by mixing and matching suitable, yet uncorrelated, items that can be co-ordinated to maximum effect. The use of “boutique strategies” by specialized property investment asset managers reinforces the point with year-on-year returns over the last 10 years.
Property Investment Trusts (PIT) have performed at varying annual rates between 9% and 15%. Investments in property structured trusts, as with real estate investment trusts (REITs), share and equity trusts and asset-backed securities, can swing in dramatically opposed directions of between 30% losses and 40% gains almost overnight. Professional asset-managed strategies, boutique portfolios, and offshore multi-asset portfolio (MAP) structures are, therefore, a collective and proven methodology to maximise gains while minimising risks.
Offshore MAPs and property trust boutiques combined will always grow despite changing fashions. In looking at ways to reduce risk and optimise returns on invested capital, we will build a hypothetical MAP structure, which in itself can be a boutique “fund-of-funds” offshore vehicle. These invest in other portfolio boutique mechanisms that incorporate property-related asset trusts.
We will assume that Peter Expat has 500,000 to invest, is a balanced investor, and wants to achieve an average annual return of 9.50% net over five to seven years. How can strategic asset management help him achieve this? Peter has indicated his willingness to accept a little volatility of risk _ approximately 15% of his investment. As a consequence, the MAP structure is balanced as follows:
- 150,000: fixed-rate deposit;
- 150,000: diversified property trusts;
- 50,000: multi-strategy shares/equity funds;
- 50,000: asset-managed emerging markets;
- 100,000: hedged/alternative investments.
In balancing the investment into non-correlated risks, Peter’s investment is allocated 40% into cash and fixed-rate securities returning guaranteed yields in relation to the diversification of securities, foreign-exchange currency investments, term deposits, tax-protected MAP structures.
A further 30% has been assigned to secured or asset-backed placements in managed property trust boutique portfolios with varying degrees of risk against return. Some 15% has been placed into variable-rate performing equity and income funds with a history of year-on-year absolute returns since inception.
The remaining 15% has been allocated to growth fund options. These are naturally higher-risk placements with substantially higher returns as a reward. Therefore, specialized asset-managed programmes are wisely advised to reduce risk from investor errors, optimize gains and negate taxes.
In summarizing investment options, how would each allocation perform?
- Fixed-rate securities and cash deposits: Discounting the exchange mechanism options of FX trading through MAP structures, the yield on basic rate-guaranteed deposits is up to 5% depending on currency.
- Diversified property trust boutiques: If professionally structured as a property trust “fund-of-funds” the top five secured and asset-backed options are in turn wrapped within the offshore MAP, returning around 10% per year.
- Collective investment allocations: These have been split among three non-correlated investment sectors ranging from cautions equities and income funds, to managed emerging markets and hedge-fund instruments. Each of the three sectors has averaged returns between 10% and 42%. By creating similar strategically positioned portfolio boutiques in each sector, which are subsequently rapped within the MAP, annualized returns are some 22% collectively.
Therefore, using combined methodologies of offshore MAP structures, portfolio boutiques, and professional asset-management programmes, the collective results of strategic investing would return an annual average of 12.58%. In relation to property-related non-physical investment allocations, there is a high optimum yield of 10% or more annually on an “absolute return” basis over one to three years.
Ultimately, investing for capital gain has nothing to do with luck. It’s a case of setting goals, discipline, strategic positioning and professional management. However, if goals are set without strategic plans, they become mere unfulfilled wishes.
Fairy tales can often embody kernels of truth and lessons for the learning, as implied in the tale of the three little pigs who invested in mud, straw and bricks. Two lost their deposits, but were bailed out by the third and more prudent investment. Proof, if any were needed, that it pays to diversify.
We have looked under the floorboards to evaluate non-physical options for diversification into property investment sectors. Today let’s look at property “boutique portfolios” using an MAP structure for maximum wealth creation.
Portfolio boutiques are ideal for co-ordinating investment styles to match. Individuals and investments both look better, and benefit more from tailor-fitted solutions. Equally, investments can become white elephants and begin to lose money if not readjusted and balanced in tune with ever-changing trends.
When investing in property assets, it’s also important to create balance and diversity by mixing and matching suitable, yet uncorrelated, items that can be co-ordinated to maximum effect. The use of “boutique strategies” by specialized property investment asset managers reinforces the point with year-on-year returns over the last 10 years.
Property Investment Trusts (PIT) have performed at varying annual rates between 9% and 15%. Investments in property structured trusts, as with real estate investment trusts (REITs), share and equity trusts and asset-backed securities, can swing in dramatically opposed directions of between 30% losses and 40% gains almost overnight. Professional asset-managed strategies, boutique portfolios, and offshore multi-asset portfolio (MAP) structures are, therefore, a collective and proven methodology to maximize gains while minimizing risks.
Offshore MAPs and property trust boutiques combined will always grow despite changing fashions. In looking at ways to reduce risk and optimize returns on invested capital, we will build a hypothetical MAP structure, which in itself can be a boutique “fund-of-funds” offshore vehicle. These invest in other portfolio boutique mechanisms that incorporate property-related asset trusts.
We will assume that Peter Expat has 500,000 to invest, is a balanced investor, and wants to achieve an average annual return of 9.50% net over five to seven years. How can strategic asset management help him achieve this? Peter has indicated his willingness to accept a little volatility of risk _ approximately 15% of his investment. As a consequence, the MAP structure is balanced as follows:
- 150,000: fixed-rate deposit;
- 150,000: diversified property trusts;
- 50,000: multi-strategy shares/equity funds;
- 50,000: asset-managed emerging markets;
- 100,000: hedged/alternative investments.
In balancing the investment into non-correlated risks, Peter’s investment is allocated 40% into cash and fixed-rate securities returning guaranteed yields in relation to the diversification of securities, foreign-exchange currency investments, term deposits, tax-protected MAP structures.
A further 30% has been assigned to secured or asset-backed placements in managed property trust boutique portfolios with varying degrees of risk against return. Some 15% has been placed into variable-rate performing equity and income funds with a history of year-on-year absolute returns since inception.
The remaining 15% has been allocated to growth fund options. These are naturally higher-risk placements with substantially higher returns as a reward. Therefore, specialized asset-managed programmes are wisely advised to reduce risk from investor errors, optimize gains and negate taxes.
In summarize investment options, how would each allocation perform?
- Fixed-rate securities and cash deposits: Discounting the exchange mechanism options of FX trading through MAP structures, the yield on basic rate-guaranteed deposits is up to 5% depending on currency.
- Diversified property trust boutiques: If professionally structured as a property trust “fund-of-funds” the top five secured and asset-backed options are in turn wrapped within the offshore MAP, returning around 10% per year.
- Collective investment allocations: These have been split among three non-correlated investment sectors ranging from cautions equities and income funds, to managed emerging markets and hedge-fund instruments. Each of the three sectors has averaged returns between 10% and 42%. By creating similar strategically positioned portfolio boutiques in each sector, which are subsequently rapped within the MAP, annualized returns are some 22% collectively.
Therefore, using combined methodologies of offshore MAP structures, portfolio boutiques, and professional asset-management programmes, the collective results of strategic investing would return an annual average of 12.58%. In relation to property-related non-physical investment allocations, there is a high optimum yield of 10% or more annually on an “absolute return” basis over one to three years.
Ultimately, investing for capital gain has nothing to do with luck. It’s a case of setting goals, discipline, strategic positioning and professional management. However, if goals are set without strategic plans, they become mere unfulfilled wishes.
