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""Vertical Capital Markets Group"":verticalus.com/ has announced the debut of the mortgage-based Vertical Capital Income Fund. Targeting the development of a quality portfolio of mortgages for investors, Vertical's newly launched project seeks to capitalize on low-priced loans.
[IMAGE]The fund will be available for investments of $1,000 or more, and Vertical hopes to provide income and growth potential via its mortgage loan offerings. In a company statement, Vertical noted that the fund will mirror previous initiatives, primarily investing in assets of residential performing loans secured by first mortgages or deeds of trust.
Commenting on the Capital Income Fund, Vertical's group president, Bayard Closser, said, ""One of the real attractions of
[COLUMN_BREAK]this investment is it doesn't correlate closely with equity and most bond markets, and whether equities or real estate go up or down, it essentially doesn't matter.""
Continuing his statements, Closser added, ""Through this structure, the fund will own the underlying collateral in the event of a loan default.""
According to Vertical, the fund may potentially ""reduce risk for investors by increasing diversification, because it has a negative correlation with stocks and other investments."" Additionally, the company disclosed that Vertical is purchasing the loans at a significant discount, ensuring that the collateral behind the mortgages is typically worth more than the amount of purchase; Vertical also confirmed that all loans included for investment in the fund will be verified using an in depended assessment.
Projecting the success of the fund, Vertical stated that it expects for more than 90 percent of its mortgage loans within the fund to qualify as performing loans, and the company also added that Vertical will have ample negotiating power to lower payments for distressed borrowers.
Recent studies by ""BlackRock Investments, LLC"":www.blackrock.com/, between 2001 and 2010 established that the benchmark index for the Vertical Capital Income Fund, the ""Barclays Capital US MBS Index"":http://etfdb.com/index/barclays-capital-us-mbs-index/, indicates a negative correlation of -0.18 with the ""S&P 500"":http://www.standardandpoors.com/indices/sp-500/en/us/?indexId=spusa-500-usduf--p-us-l from ""Standard and Poor's"":www.standardandpoors.com/. The evaluation by BlackRock considers an absolute positive correlation between two asset classes as 1.00 and sets an absolute negative correlation at 1.00.
