Your 101 Guide To A Logistics Fund

There are many different types of funds available in the market. The various types of funds are classified based on the type of investment strategies they deploy, the assets they focus on investing in, and the level of investment liquidity they provide. A Logistics Fund is a sector-specific fund, implying they primarily focus on the transportation and the logistic industry for making their investments.

Wondering what a logistics fund is? Read on to find out –



What exactly is a logistics fund?

A logistics fund, similar to a Hedge Fund, pools money from multiple investors and invests the gathered capital in the logistics industry to garner significant returns for their investors. These funds although located in a particular country, focus on finding investment opportunities all across the globe. They typically invest in logistical properties, such as ports, warehouses, vehicle fleets, etc. A good logistics fund usually invests in vehicle fleets that are comprised of either ships and airplanes. Logistics funds have a tendency to stay away from road transport fleets as they are commonly invested in by many and thus, have higher volatility that implies a higher exposure to risk.

How do they make money?

So, a Logistics Fund earns its profits by investing in logistical properties but what does that exactly mean? Well, it simply implies that a logistics fund would buy properties such as a warehouse and other such real estates that are required for the transportation of goods and lease the same to blue-chip tenants. Blue-chip tenants are typically companies that are financially stable and have rich experience in their respective industries of operation.

Apart from the above-mentioned strategy, a logistics fund also uses the strategy of buying a logistical asset, upgrading it, and then upselling the same for a profit. However, this is a less common strategy as it requires higher capital in hopes of a higher return.

A logistics fund typically only invests in the prime logistical locations around the globe unless they come across an extremely profitable investment opportunity otherwise.

What are the benefits of investing in a logistics fund? 

There are various benefits of investing in a logistics fund, such as -

1)      They help you diversify your portfolio efficiently

Unlike traditional industries, investing in the logistics industry is not that easy, especially if you wish to earn a significant return on investment. The reason is, it requires a lot of money. The best way to avoid this is to invest in a logistics fund that requires a comparatively lower capital.

2)      They help you avoid buying the properties physically

Buying a property physically involves a lot of hassle as you have to go through a lot of paperwork and undertake a few other legal processes. However, when you invest in a logistics fund, the whole documentation process is removed and this makes the entire investment experience quite convenient. 

We hope this article helps you clearly understand what exactly is a logistics fund and what are the benefits of investing in the same. 

Please Read The Original Post Here : Your 101 Guide To A Logistics Fund


Comments

Post a Comment

Popular posts from this blog

5 Advantages Of Investing In Wholesale Bonds

Image
Bonds are traded in two ways, wholesale and retail.   Wholesale bonds   are debt securities that can be sold to wholesale investors or clients at the time of issue as mentioned in the Corporations Act 2001. This can be done on the basis that all the appropriate disclosure documents are prepared and provided to the investors according to the act. These bonds trade in the OTC (over-the-counter) market, unlike retail bonds that are traded on an exchange market. Investors need a minimum investment amount of $250,000 to invest in these bonds. However, there are various types of bonds available and people should research them before investing.       Planning to invest in  wholesale bonds ? Here are a few advantages of investing in it.   Diversification             Gaining access to a wider range of bonds available in the market is quite beneficial for the investors as they could diversify their portfolios.  Wholesale Bonds  provide the investors the opportunity to diversify their investment
Read more

How Can I Invest In Capital Markets?

 There are two types of markets that people can invest in private and public markets. The public market is where people buy shares of companies through brokers and platforms to invest their money. People can invest in the market either on a long-term or short-term basis. Based on their investments and the type of investment the returns may vary. The private market is a little different than a public market. Investors who raise capital for up-and-coming companies that can promise good returns are part of  Private Capital Markets . There are different requirements that you need to fulfill in order to be able to invest in this market: Platform for investment Generally speaking, investing in private markets is not open to everyone. There are specific criteria that are required to be fulfilled by the investor to be eligible for the capital market. While this all happens when you approach an investment firm that is involved in this market, there are many platforms that allow sma
Read more