Investment 4 投资学

4-9
TYPES OF INVESTMENT COMPANompanies Open-End funds
Fund issues new shares when investors buy and
redeems shares when investors cash out Priced at Net Asset Value (NAV) Do not trade on exchanges Investors buy and liquidate through the investment company at net asset value Mutual Funds are known as Unit Trusts in some countries such as Singapore, Malaysia, and Australia
Provide a mechanism for small investors
to team up to obtain the benefits of largescale investing.
44
INVESTMENT COMPANIES
Services provided:
Administration & record keeping
Reduced transaction costs
---trade large blocks of securities substantial savings on brokerage fees and commissions
4-5
NET ASSET VALUE
Investors buy shares in investment companies. Ownership is proportional to the number of
4-10
TYPES OF INVESTMENT COMPANIES
Managed Investment Companies
Closed-End funds
No change in shares outstanding; old investors
cash out by selling to new investors Can be purchased through broker just like common stock Can be traded on exchanges Therefore, their prices can differ from NAV--priced at premium or discount to NAV
The simulation trading game will start from
Sep.19nd.
Maximum number of students in one group is 5.
Please send the TA your group’s information through email.
4-11
TYPES OF INVESTMENT COMPANIES
Other Investment Organizations
---not formally organized or regulated as investment companies ---but serve similar functions ---three important ones are:
CHAPTER 4
Mutual Funds and Other Investment Companies
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
KIND REMINDERS:
Exchanged-traded funds(ETFs)
4-3
INVESTMENT COMPANIES
Financial intermediaries that collect funds
from individual investors and invest in a wide range of securities or other assets.
Diversification & divisibility
--- investors can hold many kinds of different securities
Professional management
---support full-time staffs of security analysis ---portfolio managers who attempt to achieve superior investment results for the investors
of securities worth $120 million.
Suppose the fund owes $4 million to its
investment advisers and owes another $1 million for rent, wages due, and miscellaneous expenses.
or unit trusts in some countries) closed-end companies
4-8
TYPES OF INVESTMENT COMPANIES
Unit Investment Trusts
unmanaged—the portfolio composition is fixed for the
If you have any course registration problem,
4-2
OUTLINE
Types of investment companies
---Unit investment trust( unmanaged) ---Managed investment companies (open-end, closed-end)
shares purchased. Value” or “ NAV”.
The value of each share is called “ Net Asset Calculation:
4-6
NET ASSET VALUE: EXAMPLE 4.1
Consider a mutual fund that manages a portfolio
4-14
TYPES OF INVESTMENT COMPANIES
Hedge Funds --for private investors to pool assets --typically only open to wealthy and institutional investors --subject to less regulation --many require investors to agree to initial “lock-ups”, periods as long as several years in which investment can not be withdrawn --managers can pursue relatively risky investment strategies such as short sales, derivatives, currency speculation, merger arbitrage and so on --enjoyed great growth over the last several years: assets growing from $50 billion in 1990 to $2 trillion in mid-2008
4-13
TYPES OF INVESTMENT COMPANIES
Real estate investment trusts(REITs)
--similar to a closed-end fund. --invest in real estate or loans secured by real estate. --Equity trusts: invest in real estate directly --Mortgage trusts: invest primarily in mortgage and construction loans --can raise capital by issuing shares, borrowing from banks, and issuing bonds or mortgages.
---issue periodic status reports, keeping track of capital gains distributions, dividends, investments, and redemptions, reinvestment of dividend and interest income for shareholders
--typical partners might be trust or retirement accounts with portfolios much larger than those of most individual investors, but too small to manage on a separate basis. --investors benefit from economies of scale trading costs are reduced. --the management firm that organizes the partnership manage the funds for a fee.
The tutorial class starts from this week. If you
have any tutorial registration problem, please contact the TA. please contact SEF on the 9th floor in KKL.
Mutual Funds
---Different kinds of mutual funds ---How funds are sold ---Costs of investing in mutual funds ---Taxation of mutual fund income ---Mutual fund investment performance: a first look ---Information on mutual funds
Commingled funds Real estate investment trusts(REITs) Hedge Funds
4-12
TYPES OF INVESTMENT COMPANIES
Commingled funds
--partnerships of investors that pool funds
life of the fund. tend to invest in relatively uniform types of assets. ex: municipal bonds, corporate bonds. Sponsor(selects and assembles the securities to be included in the fund)deposits securities into a trust and sells shares or units to the public with a premium Trustee keeps the securities, maintains unitholder records, and performs all accounting and tax reporting for the portfolio. Lost market share to mutual funds---total assets have declined from $105 billion in 1990 to $29 billion in 2009.
The fund has 5 million shares outstanding.
4-7
TYPES OF INVESTMENT COMPANIES
Unit Investment Trusts (unmanaged) Managed Investment Companies open-end companies (mutual funds