Mortgage Trusts Explained
A mortgage trust is a diversified pool of mortgages that can hold conventional mortgages, including residential, industrial, and commercial, both first and subsequent-security. The Tri City Group Monthly Income Mortgage Trust focuses on residential mortgages in urban liquid markets where values are stable and reliable. The trust might also invest in government bonds or hold cash. The objective of mortgage trusts is typically to provide relatively high yields while preserving underlying capital of the investors.
Depending on its asset mix, mortgage trusts are generally a lower-risk investment than equity funds, and can offer superior, more predictable returns. Mortgage trusts can provide diversification to traditional equity and fixed income portfolios, and are a means to participate in real estate markets without directly investing in property.