Tag: offshore investing

The role of seaports and airports in globalization

Image source: wsj.com

Image source: wsj.com

The world is more connected now than it was before, thanks to the latest innovations and modern infrastructure that continue to link countries and continents to form a globalized and unified movement, especially in terms of economic activities and development. From an economic perspective, globalization is defined as an unstoppable force that fueled a level of progress towards growing and interconnected global routes of production, distribution, and consumption.

However, the process of globalization won’t be complete without the necessary infrastructure that make these interconnections possible: airports and seaports are two key players that have helped transform metropolises into global cities.

Airports have helped physically connect every country in the world, consolidating international markets and facilitating in world trade, and most importantly, helping emerging economies have access to the main markets. This also made them (EMs) viable options to be tapped by investment ventures, such as offshore mutual funds and hedge funds.

Thanks to a more connected and accessible market, companies from developed countries successfully founded international operations as well as foreign subsidiaries in developing regions, enhancing import penetration and promoting homogenization of domestic markets.

Seaports, on the other hand, have played their role in facilitating commercial and trade activities by providing a strategic access to land and navigable waters. Essentially, they have served as the main component of the overall transportation sector both for human passengers and goods.

One of the reasons why many countries rely on seaway transport is because of its low-cost but highly effective transportation system. Industries and companies need affordable and secure means of exporting their products, goods as well as raw materials.  This is not a coincidence that the biggest industries around the world are either strategically located in the coastal belts or have access to a nearby major port.

Maritime port areas also host a variety of activities from infrastructure services, cargo handling, mooring, towage, and more.

Offshore mutual funds: International investing made easier

Image source: moneycontrol.com

Image source: moneycontrol.com

Many seasoned investors can agree that mutual funds are the ideal investments options especially for those who are still new to the trade or are having difficulty finding time to study how the securities markets work and behave. In definition, mutual funds are a type of investment program that is directly funded by shareholders, trading in several diversified holdings. The offshore transactions involved in this type of investment are the easiest to deal with, especially that they are professionally managed and are often tax-efficient.

In particular, offshore mutual funds can be classified into these categories:

  1. Equity growth fund

This type of mutual fund is also known as a “stock fund.” Basically, it focuses on the investment in equities, which signify ownership of company shares. This is one of the most aggressive and risk-driven mutual funds available, but also among the most potentially profitable.

  1. Fixed-income fund

The focus of this fund is in the short-term fixed income securities. Some examples of this type of mutual fund are treasury bills, government bonds, commercial paper, and corporate bonds.

  1. Money market fund

This type of fund invests in short-term debt securities (commercial paper and US Treasury bills). It’s a relatively safe and open-ended mutual fund that provides decent yield.

  1. Balanced fund

Some investors prefer this type of fund for two reasons: low-risk and potential for capital appreciation. Aside from being a safe option, it allows investors to invest in a particular asset class based on the set minimum and maximum amounts. It is mainly a combination of bonds and stocks.

  1. Stable income fund

The purpose of this type of fund is to produce an income stream for its shareholders through putting money in securities that provide interest payments and dividends.

  1. Emerging market fund

The unique thing about an emerging market fund is its concentration on the investment of securities from several emerging economies in the developing world.  This provides high chances for significant growth.

For a deeper understanding of these offshore mutual funds, consult with an advisor from leading offshore investment firms, such as LOM Financial.