Investment Products Flashcards
What is an investment trust company?
Essentially a bundle of securities managed by board of directors.
What are the features of an investment trust company?
Investors can purchase shares which can be traded like ordinary shares, is closed ended, since No new shares are created when an investor purchases shares
What is a unit trust?
Portfolio of securities managed by a board of trustees on behalf of unit holders.
What is the structure of a unit trust?
It is open ended because new units are created when an investor buys a a stake in the trust.
Is a unit trust or an investment trust company a trust in law?
Unit trust is recognised as a trust in law. Investment trust company might have a split structure with different share types having different risk/rewards.
What way is an ETF have the benefits of an open ended invested company (OEIC)?
That can be traded in the same way as an ITC ie shares can be bought/sold via broker on stock market
What is an exchange traded commodity?
An exchange traded note offering Reta’s commensurate with an investment in commodities or a commodity index.
Private client funds are managed by stockbrokers for individuals what types do they include?
Execution only, advisory dealing services, portfolio advisory, portfolio discretionary. Objectives and structure of these funds with depend on dent circumstances.
What is a structured product?
Investment that has a well defined by reference to a specific underlying asset, such as the FTSE 100
What do platforms do?
Simplify and consolidate the investment process for individual investors by bringing together the investment reporting and administration of investments and providing the capability to send regular portfolio valuation and tax statements.
What is a common structure to report?
Might include portfolio valuation and asset allocations, the history of dealing, adviser chargingand performance relative to a benchmark.
What are the characteristics of defined contribution?
Involves saver taking on investment risk and it they do not buy an annuity at retirement also with longevity risk
What are characteristics of defined benefit?
Company in promising to pay a pension till death takes on liability.
What does general insurance involve?
Short term contracts backed by more liquid assets
What is life assurance?
Long term insurance mix of life insurance and long term savings
