Alternative Investments

Alternative Investments It’s a big world of opportunities. We’re not afraid to step outside of the public markets.

Alternative investments are three more ways we diversify. Compass Portfolio Series’ purchasing power grants us access to investment opportunities other wise not accessible to individuals. These opportunities include Real Estate Investment Trusts (REITs), Commercial Mortgages and Private Equity. Most of us may not be able to access alternative investments by our own abilities alone. By pooling monies together, not only do we have access, we have choices in selecting top pedigree Sub-Advisors for each alternative investment. Alternative asset classes complement equity and bond investments by potentially altering the risk characteristics of each portfolios. This translates to the possibility for higher rates of return while reducing volatility over market cycles.

Real Estate Investment Trusts


Real Estate Investment Trusts (REITs) are used to diversify Compass Portfolio Series because their underlying business has little association with whichever industry propels the stock market at any time. REITs are ultimately very simple: they own commercial properties and generate rental income. A large percentage of their rental income is paid to investors as distributions.

Real Estate Investments Trusts 
 

Commercial Mortgages


Commercial mortgages are an investment in a company’s ability to repay its mortgage. They offer a higher yield than government bonds because every company carries some risk of defaulting on its mortgage payments. When Compass adds a commercial mortgage, the borrowing company and the property are evaluated extensively. The property is then used as security for the loan. Commercial mortgages are grouped together and securitized, which allows Compass to sell them more easily if we choose not to hold them for the complete loan term.

 Commercial Mortgages
 

Private Equity


Private equity offers investment opportunities in well-managed companies that aren’t publicly traded. Private companies are generally much less affected by quick shifts in market sentiment than publicly traded companies. They also have a greater growth potential than many publicly traded companies because they are in the early stages of their life cycle, which also compensates for their illiquidity. At appropriate percentages of the total asset mix, private equity can enhance your portfolio’s risk-return profile. The more aggressive Compass Portfolios hold modest amounts of private equity to enhance their returns, while the most conservative portfolios hold none.


Private Equity