The Benefits of Contributory Mortgage Funds

For high-net-worth individuals looking to boost their portfolio through private mortgage investment, there are typically two options to consider: pooled mortgage funds and contributory mortgage funds.

A pooled mortgage fund contains multiple mortgage investments, managed by a professional team or fund manager. This type of fund pools money from investors together, with the investments directly tied to the overall results of the fund, rather than the individual mortgages.

As opposed to a pooled mortgage fund, investing in a contributory mortgage fund means that investors can choose which specific properties in the fund they wish to invest in. While a contributory mortgage fund is still controlled by a fund manager, the performance of one mortgage does not affect the fund as a whole. 

Contributory mortgage funds offer investors regular income in the form of interest payments, often providing higher returns than other types of fixed-income investments.

Safe and stable

Savvy investors looking for private mortgage investment opportunities often find contributory funds for first mortgages to be a stable addition to their portfolio.

While first mortgage funds tend to provide lower returns than other kinds of mortgage investments, they also come with reduced risk and a regular source of income. This makes them an excellent choice for those looking to add more reliable investments to their portfolio, which will likely also contain riskier investments such as stocks and bonds.

First mortgage contributory funds give individuals the flexibility to invest in a way that most benefits their portfolio, whether they want to spread the risk across many mortgages within the fund or focus on one mortgage in particular.

Risk and reward

Contributory mortgage funds also provide high-net-worth individuals with more aggressive investment options, particularly through funds focused on second mortgages. Second mortgage investment funds carry greater risk but also offer more lucrative results. This can be particularly appealing to experienced investors or those who have knowledge of the property market. 

Contributory mortgage funds may also include investments beyond residential real estate, with commercial mortgages also on offer within certain funds. Commercial mortgages can offer significant returns at the expense of greater risk, making them best for investors who have knowledge of the specific industry for each property.

Choose the right investments for your portfolio

Above all, contributory mortgage funds allow savvy investors to have more control over where their money goes, giving them the opportunity to optimise their investment strategy to suit their portfolios. 

Given the flexibility of contributory mortgage funds, they can be an excellent investment for a wide variety of individuals, including investors looking for a safer and more reliable addition to their portfolio than shares.

Arthurmac specialises in connecting with high-net-worth individuals and finding the right private mortgage investment to strengthen their portfolios. Based in the Bayside area, Arthurmac has built a reputation for helping Melbourne investors boost their portfolios, even throughout economic challenges such as the Global Financial Crisis and the COVID-19 pandemic.To speak with Arthurmac’s mortgage fund experts about your investment strategy, simply give our team a call on 1300 417 690 or complete our contact form today.