Diversification Through Ingenuity: Doing Good and Doing Well for Yourself

We’re aware of the traditional asset classes of equities, bonds, deposits, and hybrid securities such as REITs and Structured Products. 

We need to understand that traditional asset classes usually have an accompanying correlation to the general market direction. Therefore you would often see performance quoted as an under or overperformance against a benchmarked index or indices. 

The adage to “not put all your eggs into one basket” seems less heeded when the red-hot equity markets are fuelled in part by a COVID-based recovery and hot money flowing into the markets. 

Covid-19 has shown and exacerbated the gaps and inequalities generated by the global financial crisis of 2007-08. While banks have become ever more reluctant to enter the trade finance space, demand for credit has grown in international trade. At the same time, falling yields across traditional money market investments, such as U.S. Treasury notes and government and private money market funds, have left investors with surplus liquidity and an increasing need for portfolio diversification. With short-term returns, competitive yields, and low correlation to international quoted markets, trade receivables are poised to meet investor needs and continue to grow in popularity as an asset class.

The Environmental, Social, and Governance (ESG) factors to holding and participating in trade receivables investment also add value to its attractiveness as an investment asset class. Think about the positivity of contributing to the growth in international trade, access to markets, alleviation of poverty and joblessness, and being a change agent for trade enablement and being a crusade of free enterprise; yes, you can. 

Contact our team info@incomlendcapital.com to find out more about our ESG contributions in trade finance.

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