description of the following investments options and elaborate on the risk factor of unit trust ,managed portfolio ,shares ,debentures ,fixed property?
Answers
1- A unit trust is an unincorporated mutual fund structure which consists of funds holding assets and providing profits which is transferred to individual unit owners. The reinvesting back into funds, doesn't happen here.
Disadvantage: The fund manager manages everything, so you cant compare any broker rates, so that's a risk.
2- managed portfolio :Its a securities account managed by a portfolio manager. He has power of attorney to deal in any assets like shares, bonds, and mutual fund units.
Disadvantage: The performance of this manager might vary and cost you. Because its our money to loose.
3- shares : Its the parts into which a company's capital is divided, giving the holder a proportion of the profits according to their value.
disadvantage: dividend uncertainty, high risk, fluctuation in market price.
4-debentures : This is a long-term security which has a fixed rate of interest. Its issued by a company and secured by collateral like assets.
Disadvantage: too much dependence on debentures, is a financial liability.
5- fixed property: They are fixed and or tangible assets, not current like cash.
disadvantage: values of fixed property falls and judging fluctuating market conditions is a problem.
The unit trust, the managed portfolio the, shares the debentures and the fixed property are all the different types of investment options that an individual can choose from.
There are some of the investments where the returns are certain whereas there are others where the returns are uncertain and risk is high.