Sedmak: While many other fixed income funds may own CRE Finance / CMBS, only Ladder Select Bond Fund provides a purpose-built, custom allocation to the asset category in a no-load, daily liquidity fund solely focused on commercial real estate finance / commercial mortgage-backed securities (CMBS). Because CMBS investments tend to offer a significant yield advantage over government bonds and similarlyârated secured corporate issues, we think the Ladder Select Bond Fund provides enhanced income and diversification within a traditional fixed income portfolio.
In addition to income, senior secured CMBS securities provide helpful capital preservation protections, and the Fund has the flexibility to actively manage duration and interest rate risk depending on market conditions. Investment grade-rated CMBS typically exhibit strong credit characteristics, trade in a liquid market, and are generally less correlated with broader fixed income holdings than many other fixed income alternatives. By its nature, CMBS typically offers geographic, property-type, and industry-specific diversification.
We think there’s a prudent place for a custom-made allocation to a CRE Finance /CMBS fund in many fixed income portfolios where the advisors and/or principals are seeking secured income, reduced correlation, and enhanced diversification. Can I also note that the fund (LSBIX) is currently available on the TD Ameritrade, Charles Schwab, and Pershing FundVest platforms and the advisor can waive the $100,000 institutional investment minimum down to $2,500 to accommodate individual investor demand on those platforms.
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