Description of the following investment options and elaborate on the risk factor of each :unit trust,managed portfolio ,shares, debentures and fixed property
Answers
Unit trust, an unincorporated mutual fund structure that allows funds to hold assets
The profits earned go straight to individual unit owners. It is not reinvested back into the fund.
Managaed portfolio is when a professional investor sells and buys shares in the sharemarket on your behalf.
Shares are equal units of ownership in a Company's capital. The holder of shares gets a share of profit.
Debentures are debt instruments, which give the holder a right to get fixed interest income.
Fixed Property, also known as long term tangible assets are the assets that add value to an organization and help it in value addition. For example Land, Building and Machinery.
Unit trust. It is a collective investment that is then split into units and priced and sold to different investors who then earn annual returns from the profits of their units. A single unit represents a variety of stocks.
Its success depends on how the experience and expertise of the managers.
Managed portfolio. This is whereby an investor leaves their portfolio to a professional for management and then pay them for it.
The investor incurs huge costs in paying for the service especially if your portfolio is small.
Shares. They represent a portion of ownership in a company.
Their price fluctuates often and a dividend is not guaranteed.
Debentures. It is a loan instrument issued by corporation to the public to solicit for money.
It is unsecured and in case of dissolution,debenture holders have least priority to be paid.
Fixed property. Also known as fixed assets,this is the tangible assets of a company.
They are hard to liquidate assets.