Investment companies

• Definition of investment co.:
• financial intermediary
• earn fees to pool + invest investors' funds
• giving the investor rights to a proportional share of the pooled fund performance
• Categories:
• Unmanaged co (<=> unit investment trust)
• hold a fixed portfolio of investments for the life of the co.
• ready to redeem the investor's shares at mar. value (similar to open-end fund)
• Managed co:
• Open-end funds operated by investment co. (MUTUAL FUNDs) offer redemption feature
• Close-end funds => close-end investment co. issues shares which are then traded in secondary stock mar.
• Valuing investment co. shares: NAV
• NAV = total assets - liabilities
• Share value:
• of un-managed & open-end investment co.: = NAV ('cos the co. ready to buys back the share at NAV)
• of close-end investment co.: determined in secondary mar => could be at a premium or discount to NAV
• Fund mgnt fee:
• Categories by no. of times charges:
• One-time charges
• Annual charges: operating expense
• mgnt fees => port. mgnt incentive fee
• administrative expenses
• continuing distribution fees: fees paid back to the party hat arranged the initial sale of the shares
• Categories by types of co.
• Unmanaged co: fee for the effort of setting up the fund.
• Managed co.:
• front-end load: sale commission charged at purchase
• back-end load: charge to exit
• Investment strategies: primarily invest in equity, characterized as
• style: focus on the underlying characteristics common to certain investment
• growth strategy may focus on high PE
• value strategy may focus on low PE
• sector: focus on a particular industry
• index: an index fund tracks an index
• global: includes sec. from around the world and might keep port. weights similar to world mar. capitalization weights.
• international fund: does NOT include securities from the home country
• global fund: includes...
• stable value: 
• invest in sec. such as 
• short-term fixed income instruments
• guaranteed investment contracts which are guaranteed by the issuing insurance co. 
• pay principal and a set rate of interest
• ETF (Exchange Trade Funds)
• index-based investment product: allow investors to buy/sell exposure to an index through a single financial instrument
• trade on stock mar like shares of any individual co. but ETF's shares are shares of a portfolio, not of an individual co.
• "in-kind" creation & redemption process used by open-end & UIT (to be continued...)
• Pros & cons of ETFs: in short, ETF is appropriate for specific investors whose strategy is short-term investing, frequent trading, small capital
• Pros
• ETFs dont cover all the market: only some segments (except US: various ETFs cover all the market).
• 
  
• Cons
• 
  
• Types of ETFs: ETFs can be grouped by investment category, based on their investment target
• Broad domestic market index: launch on the major local stock index
• Style: value vs growth or large - mid - small cap
• Sector or industry: ETFs track a sector index or invest in baskets of stocks from specific industry sectors.
• Eg.: REITs
• Foreign country or region (multiple countries)
• Fixed income
• Commodity
• Actively managed funds
• Risks
• market risk
• asset class/sector risk
• trading risk
• tracking error risk
• derivatives risk
• currency & country risk
• Application
• implementing asset allocation
• diversifying sector/industry exposure
• gaining exposure to international mar
• equitizing cash
• managing CF
• completing overall invest. strategy
• bridging transitions in fund mgnt
• managing port. risk
• applying relative value, long/short strategies
• 
  

ETF (Exchange Traded Fund)

Hic, mìh xin hứa là mìh sẽ đọc lại fần ETF rồi sẽ ngâm kíu rồi ném đá cái bài này
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Lại hỏi về: pros & cons of khớp lệnh định kỳ & liên tục, mìh chỉ biết đc mỗi cái là khớp lệnh liên tục sẽ fản ánh biến động giá more quickly, that's all +_____________+

Cũng hôm qua, 1 lần nữa nhận thấy rằng làm financial analyst cũng chẳng ghê gớm lắm đâu ạ. Nếu mìh "khinh" bọn accountant rằng result của bọn nó chỉ để làm input cho mìh, thì result của mìh cũng chỉ là input for investors to make decisions. Nên mìh thấy investors vĩ đại lắm!

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