A hedge fund is a pooled investment fund that holds liquid assets and that makes use of complex trading and risk management techniques to improve investment performance and insulate returns from market risk. Among these portfolio techniques are short selling and the use of leverage and derivative instruments. In the United States, financial regulations require that hedge funds be marketed only to institutional investors and high-net-worth individuals.
Passive management is an investing strategy that tracks a market-weighted index or portfolio. Passive management is most common on the equity market, where index funds track a stock market index, but it is becoming more common in other investment types, including bonds, commodities and hedge funds.
Investment is traditionally defined as the "commitment of resources to achieve later benefits". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broader viewpoint, an investment can be defined as "to tailor the pattern of expenditure and receipt of resources to optimise the desirable patterns of these flows". When expenditures and receipts are defined in terms of money, then the net monetary receipt in a time period is termed cash flow, while money received in a series of several time periods is termed cash flow stream.
An index fund is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that it can replicate the performance ("track") of a specified basket of underlying investments. While index providers often emphasize that they are for-profit organizations, index providers have the ability to act as "reluctant regulators" when determining which companies are suitable for an index. Those rules may include tracking prominent indices like the S&P 500 or the Dow Jones Industrial Average or implementation rules, such as tax-management, tracking error minimization, large block trading or patient/flexible trading strategies that allow for greater tracking error but lower market impact costs. Index funds may also have rules that screen for social and sustainable criteria.
Open-end fund is a collective investment scheme that can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself, rather than from the existing shareholders. The term contrasts with a closed-end fund, which typically issues at the outset all the shares that it will issue, with such shares usually thereafter being tradable among investors.
A closed-end fund, also known as a closed-end mutual fund, is an investment vehicle fund that raises capital by issuing a fixed number of shares at its inception, and then invests that capital in financial assets such as stocks and bonds. After inception it is closed to new capital, although fund managers sometimes employ leverage. Investors can buy and sell the existing shares in secondary markets.
A mutual fund is an investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in Europe, and the open-ended investment company (OEIC) in the UK.
An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars. Many ETFs provide some level of diversification compared to owning an individual stock.
The Vanguard Group, Inc. is an American registered investment advisor founded on May 1, 1975 and based in Malvern, Pennsylvania, with about $9.3 trillion in global assets under management as of May 2024. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management. Along with BlackRock and State Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in corporate America.
Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts/mandates or via collective investment schemes like mutual funds, exchange-traded funds, or Real estate investment trusts.
A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A fund of funds may be "fettered", meaning that it invests only in funds managed by the same investment company, or "unfettered", meaning that it can invest in external funds run by other managers.
A unit trust is a form of collective investment constituted under a trust deed. A unit trust pools investors' money into a single fund, which is managed by a fund manager. Unit trusts offer access to a wide range of investments, and depending on the trust, it may invest in securities such as shares, bonds, gilts, and also properties, mortgage and cash equivalents. Those investing in the trust own "units", whose price is called the "net asset value" (NAV). The number of these units is not fixed and when more is invested in a unit trust, more units are created.
Mutual fund fees and expenses are charges that may be incurred by investors who hold mutual funds. Operating a mutual fund involves costs, including shareholder transaction costs, investment advisory fees, and marketing and distribution expenses. Funds pass along these costs to investors in several ways.
The expense ratio of a stock or asset fund is the total percentage of fund assets used for administrative, management, advertising (12b-1), and all other expenses. An expense ratio of 1% per annum means that each year 1% of the fund's total assets will be used to cover expenses. The expense ratio does not include sales loads or brokerage commissions.
The Free Enterprise Action Fund was a mutual fund operated by Steven Milloy and Tom Borelli, with the goal of counterbalancing the activities of self-described ethical investment funds. Whereas "ethical investment" funds avoid investments in firms that are accused of damaging the environment or of other negatively regarded behaviors, the Free Enterprise Action Fund sought out such investments, based on Milloy's claim that such criticisms are typically based on political bias or junk science. The fund ceased operations in 2009 and was merged into the Congressional Effect Fund.
Value averaging (VA), also known as dollar value averaging (DVA), is a technique for adding to an investment portfolio that is controversially claimed to provide a greater return than other methods such as dollar cost averaging. With the method, investors add to (or withdraw from) their portfolios in such a way that the portfolio balance reaches a predetermined monthly or quarterly target, regardless of market fluctuations. For example, an investor may want to have a $3600 investment in 36 months. Using VA, the investor would aim to have a total investment value of $100 at the beginning of the first month, $200 at the beginning of the second month, and so on. Having invested $100 at the beginning of the first month, the investment may be worth $101 at the end of that month. In that case, the investor invests a further $99 to reach the second month objective of $200. If at the end of the first month, the investment is worth $205, the investor withdraws $5.
A performance fee is a fee that a client account or an investment fund may be charged by the investment manager that manages its assets in addition to its management fee.
Jones v. Harris Associates L.P., 559 U.S. 335 (2010), is a case decided by the United States Supreme Court in which investors claimed that the fees they paid to an investment advisor were too steep, violating the Investment Company Act of 1940.
An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These advantages include an ability to:
All asset management companies (AMC) in Singapore are being oversee by Monetary Authority of Singapore (MAS). AMC is generally an asset management / investment management company/firm that invests the pooled funds of investors in securities in line with the stated investment objectives. These can include private equity, venture capital, hedge funds, external asset managers and mutual funds in Singapore.
