provide a description of the following investment options and elaborate on the risk factor of each
unit trust
managed portfolio
shares
debentures
fixed property
Answers
A unit trust is similar to a mutual fund where an asset management company hold assets and divides them into small units distributed to the public.
Risk is lesser because investments are diversified.
Managed Portfolio -
In this case the shareholdings and other investments are managed by an investment professional on behalf of individual clients.
Risk is controlled by the experience of an investment professional.
Shares -
A public company shares its capital in the stock market as small units called as shares and the profit is divided in the form of dividends.
It is one of the most risky assets where your investment will fluctuate according to market conditions.
Debentures -
Medium and long term debt instruments which will give a fixed rate of interest guaranteed by the company issuing debentures.
Low risk if the company has sound business prospects in future.
Fixed property -
It gives fixed returns for the term of investment.
It has absolutely risk like a savings account.