Building an investment portfolio for the long term

As wholesale investors, we all understand that growing wealth is more of a marathon than a sprint. It’s not about the quick wins or the flashy promises – it requires thoughtful decisions, time, and consistent, steady average growth.

When we talk about crafting a long-term investment portfolio, we’re thinking about investing in a balanced mix of assets that can ride out market downturns and still keep moving forward. The keys to achieving this? Diversification, understanding our risk tolerance, and having a clear idea of our investment time horizon.

Here are some key lessons we have learned along our journey as investors.

The importance of steady growth

In our investment journeys, one principle has always guided us: steady growth trumps short-term bursts. The allure of quick gains can be a ‘siren’s song’, but as seasoned investors, we have found it’s more important to seek out opportunities that offer more moderate but reliable growth over the long term.

Chasing after the market’s flavour of the month or timing the market rarely yields sustainable results. These opportunities often involve being exposed to concentrated risk, which is something we are not comfortable taking.

A thoughtful approach to diversification within a debt portfolio

Diversification is one of the most cited terms in the investment world, and for good reason. A diversified portfolio helps us spread our investment risk and, importantly, can smooth out the bumps in the market ride.

But diversification is not just about having a wide variety of investments; having the right kind of variety matters. And there’s a point beyond which adding more variety may not necessarily add more value: it may even dilute potential returns.

In building the Merx Wholesale 1 PIE Trust – a fund that we don’t just manage, but we are also invested in with our own personal funds – we didn’t want to be overly reliant on one sector. To reduce concentration risk within the single-asset class portfolio, we invest in a diverse range of loans to a range of unrelated borrowers and risk profiles across the business and property sectors. Of course, single-asset class diversification does not provide the same level of diversification as investing in multiple asset classes, but the loans themselves are diversified. We believe this approach provides just the right level of diversification for our goals.

Taking the long view

We all know that all investments come with risk. The key question is not how to avoid it, but how to manage it and ensure it’s appropriate for our goals, risk tolerance and time horizon.

As investors, our time horizon is an integral part of our investment strategy. Generally, the longer our investment horizon, the more risk we can afford to take – but it needs to be calculated risk. We are not just thinking about the next quarters; we’re thinking years or decades down the line. We believe there will continue to be demand for debt from business owners and property investors that fall outside the boxes of main banks. 

Keeping your portfolio on track and managing risk means reviewing your investment mix over time. As market conditions shift, some of your investments may grow faster than others. Regular reviewing and potentially rebalancing provides an opportunity to take a step back, review your strategy, and make any necessary adjustments.

Building a long-term investment portfolio isn’t a static process, and as wholesale investors, we have learned that patience is one of the most powerful tools at our disposal. In our experience, the slow and steady approach – paired with regular portfolio reviews and rebalancing – can help withstand the inevitable volatility and offer reliable growth over the long term.

Like to become part of our journey?

The Wholesale 1 PIE Trust is a reflection of the management team’s own journey and personal commitment. If you’d like to become part of this journey, click here to learn more and give us a call on 09 215 9364 to discuss further. We look forward to hearing from you.

Note: This article is intended to provide general information and does not constitute financial advice. We recommend you speak with a financial adviser for advice tailored to your individual circumstances. Potential investors with Merx must qualify as Wholesale Investors as that term is defined in sections 3(2)(a) – (c) or 3(3)(a) of Schedule 1 of the Financial Markets Conduct Act (“FMCA”). The Trust is not suitable for retail investors.

30.99

%

Returns Since Inception

Returns based on an actual company investor account with net returns re-invested monthly. Past performance is not a guarantee of future performance. The fund was established 30 June 2022 and made its first investments in September 2022.

Why Invest with Merx

About the Merx Wholesale 1 PIE Trust: Structure, principles: management and more

Comments from Merx Investors

I have enjoyed investing with Merx and learnt a lot through the process too. Merx have been very transparent with what they do and the communication has been consistent. Wouldn’t be a testimonial without mentioning the returns too, thanks for those. Looking forward to being a part of the journey for years to come.

Luke

There's a lot to be said for a fund where the managers invest alongside their investors. It's a real partnership where the interests of investors are prioritised. The returns to date have been great, the unit structure gives me the flexibility I want, and I've been really impressed with the communication.

Aaron

I've been impressed by how Merx looks after their investors - from how the fund is structured for redemption, reinvestment, and tax efficiency - to the communication and care in understanding my investment goals. It makes a difference - investing alongside managers who are also invested in the fund.

John

Aligned Interests

Aligned interests is a core principle of the Merx Wholesale 1 PIE Fund. As the Trust’s management team, we personally invest alongside our investor partners. We have the same risks and potential returns as our investors.

The role of economic cycles in investment

Investor's Journey: Merx Director,
Andrew Dunning

Why diversification matters for investors

Get the detail – fund description, management, fees, risks and more. Request the Merx Wholesale 1 PIE Trust Investor Brochure here.
Request the Merx Wholesale 1 PIE Trust Investor Application form here. Note: the fund is not suitable for retail investors.

Merx Wholesale 1 PIE Trust Returns

Year 1 actual net return (on company investor portfolio reinvesting)

20.13%

 

Average monthly distribution (annualized)

17.50%

 

Returns since inception

30.99%

Returns based on an actual company investor account with net returns re-invested monthly. The fund was established 30 June 2022 and made its first investments in September 2022. Past performance is not a guarantee of future performance.

Like to find out more?

Book
a call today.

*Returns are net actual returns distributed to investors (annualized) – net of all fees and costs before tax. The fund was established 30 June 2022 and made its first investments in September 2022. Past performance is not a guarantee of future performance.

Investor Brochure

Important information for investors

Investment in the Trust is open only to wholesale investors as set out in schedule 1, clauses 3(2)(a)-(c) and 3(3)(a) (inclusive), or persons who are otherwise not required to receive disclosure under Part 3, of the Financial Markets Conduct Act 2013 (“FMCA”).

Investor Application

Important information for investors

Investment in the Trust is open only to wholesale investors as set out in schedule 1, clauses 3(2)(a)-(c) and 3(3)(a) (inclusive), or persons who are otherwise not required to receive disclosure under Part 3, of the Financial Markets Conduct Act 2013 (“FMCA”).