Introduction Flashcards
Collective Investment
Allowing investors to pool their assets
Advantages of Collective Investments
Not able to allocate time to manage
Expertise
Handle admin
Diversify portfolio
Passive Fund Management
Belief Markets efficient
Share prices reflect their true worth
Tracker (Passive) funds advantages
Most active managers don’t outperform a tracker
Lower fees than actively managed fund
Core Satellite Management
Combination of Both passive and active
Tracker (Passive) funds disadvantages
May not meet all investors objectives
at mercy of markets
Active Fund Management
Believe markets are inefficient
Beat the market
Collective Investment schemes in UK
Regulated
- Authorised UK funds
- Recognised UCITS (Europe)
Unregulated
- Hedge funds (can’t be freely marketed)
OEICS stands for
Open Ended Investment Companies
Also known as ICVCS
UCITS Compliant
Promote within EEA
Cannot invest in property + commodity derivatives
Non - UCITS Retail scheme
UK only
Can invest in property
Dilution
Levy charged on purchase / sale of shares
OEICS Pricing
- Single pricing
Pricing used mid value of underlying asset
