Asset Classes

What is an

Asset Class?

An asset class is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. These investments often behave similarly in the marketplace. Common asset classes include equities, fixed income, cash and cash equivalents, real estate, commodities, and currencies.

There is usually very little correlation among different asset classes. Our Financial advisors at MKII focus on asset class as a way to help investors diversify their portfolios. By combining assets from different asset classes with different cash flow streams and varying degrees of risk, investors can reduce risk and increase the probability of making a positive return.

Here are the

Explanations of various common asset classes we recommend for your portfolio

Equities represent ownership in a company. Investors buy shares of stocks with the expectation that the company will perform well and increase in value. Stocks are generally considered higher risk than bonds but offer higher return potential.

Fixed income investments involve lending money to an entity (e.g., government or corporation) in exchange for regular interest payments and the return of the principal at maturity. Bonds are a common type of fixed income investment.

Cash and cash equivalents represent actual cash on hand and securities that are similar to cash, such as Treasury bills, guaranteed investment certificates (GICs), and money market funds. This type of investment is considered very low risk, but returns are also lower than other asset classes.

Real estate investments involve buying or financing real property, such as residential or commercial buildings. Real estate can provide income through renting or leasing the property, as well as potential appreciation in value over time.

Commodities are physical goods, such as gold, oil, or agricultural products. Investors can buy commodities directly or invest in futures contracts to speculate on price movements.

Currencies represent the money used by different countries. Investors can trade currencies through forex (foreign exchange) markets to profit from changes in exchange rates.

Nontraditional

Asset Classes Offered by MKII (Alternative investments)

We offer a range of asset classes to our investors, focusing on alternative investments that can provide higher returns compared to traditional asset classes like equities and fixed income. Some of the asset classes commonly offered by private equity firms include:

Private

  Equity

This is the core asset class offered by private equity firms. It involves investing directly in private companies, either through buyouts (acquiring a controlling stake in a company) or growth capital (investing in a company to help it expand).

Venture

   Capital

Venture capital is a subset of private equity that focuses on investing in early-stage or startup companies with high growth potential. These investments are typically riskier but can offer substantial returns if successful.

Real

    Assets

Private equity firms may also offer investments in real assets such as real estate, infrastructure, and natural resources. These investments provide exposure to tangible assets that can generate income and appreciate over time.

Distressed

   Debt

Some private equity firms specialize in distressed debt investments, where they purchase the debt of struggling companies at a discount with the aim of restructuring or turning around the business for profit.

Mezzanine

  Financing

Mezzanine financing involves providing debt capital that sits between senior debt and equity in the capital structure of a company. Private equity firms may offer mezzanine financing as part of their investment strategies.

Secondary Market

    Investments

Private equity firms may also provide opportunities for investors to buy and sell existing stakes in private companies through the secondary market, offering liquidity to investors looking to exit their positions.

We tailor our offerings based on investor preferences, risk appetite, and investment objectives. By providing access to diverse asset classes beyond traditional stocks and bonds, MKII aim to deliver attractive risk-adjusted returns for our clients.