Pooling of funds brings a number of benefits, including:

is seen in those types of investment funds that are often described as index tracker funds. Index-tracking, or indexation, involves constructing a portfolio in such a way that it will track, or mimic, the performance of a recognized index.

Indexation is undertaken on the assumption that securities markets are efficiently priced and can

therefore be consistently outperformed.

seeks to outperform a predetermined benchmark over a specified time period. It does so by employing fundamental and technical analysis to assist in the forecasting of future events, which may be economic or specific to a company, so as to determine the portfolio’s holdings and the timing of purchases and sales of securities.

which is picking the shares of companies with present opportunities

to grow significantly in the long term

which is picking the shares of companies that are undervalued relative to their

present and future profits or cash flows

which is picking the shares whose share price is rising on the basis that this

rise will continue

the flip side of momentum investing, which involves picking shares that are

out of favor and may have hidden value

Index-trackers and actively managed funds can be combined in what is known as core-satellite

management

is an investment fund that can issue and redeem shares at any time.

The fund can create new shares in response to this demand, issuing new shares or units to the investor at a price based on the value of the underlying portfolio.

Investors can place instructions to buy or sell shares in ___ by contacting the fund directly

Investors can place instructions to buy or sell shares in ___ by stock exchange

refers to a series of EU regulations that were originally designed to facilitate the promotion of funds to retail investors across Europe.

which translates as an investment company with variable capital or, in other words, an openended investment company. They are usually structured as an umbrella fund, which means that each fund will have multiple other funds sitting under one legal entity.

They have a bid price, which is the price the investor receives if they are selling, and an offer price, which is the price the investor pays if buying. The difference between the two is known as the bid-offer spread.

Legal owner and beneficial owners of Unit Trust

In an OEIC, the __ is responsible for the day-to-day management of the fund, including managing the investments, valuing and pricing the fund and dealing with investors. The __ is the legal owner of the fund investments and the __ itself is the beneficial owner, not the shareholders.

has the option to be either single-priced or dual-priced.

capital of the fund is therefore fixed, and does not expand or contract in the way that an open-ended fund’s capital does.

In the US, they are referred to as closed-end funds and are one of the three basic types of investment companies alongside mutual funds and unit investment trusts. In Europe, they are known as investment trusts or investment companies.

They are normal investment companies that pool investors’ funds to invest in commercial and possibly residential property.

is an investment fund, usually designed to track a particular index.

ETFs are

this method requires each constituent of the index being tracked to be held

in accordance with its index weighting. Although full replication is accurate, it is also the most expensive of the three methods and so is only really suitable for large portfolios.

this method requires a representative sample of securities from each sector of the index to be held. Although this method is less expensive, the lack of statistical analysis renders it subjective and potentially encourages biases towards those stocks with the best perceived prospects.

this method costs less than fully replicating the index tracked, but is statistically more complex. It uses a sophisticated computer modelling technique to find a representative

many hedge funds can borrow funds and use derivatives to potentially enhance returns.

are reputed to be high-risk.

Private equity arrangements are now usually structured in different ways from retail

investment funds. They are usually set up as ___ with high minimum investment levels or as private placement funds.