Investment companies
Investment companies buy and sell equities, bonds, and other financial
assets on behalf of their clients, and with their clients’ cash. Investors
buy a stake in a fund and their money is pooled to buy a range of assets.Investment companies and diversification
Diversified investment companies invest in a wide range of assets and in various
securities (cash, bonds, and stocks) within each kind of asset, whereas non-
diversified companies invest in a single industry or asset. A diversified portfolio
will spread risk, and limit the impact of any market volatility.If the property market
is expected to do well, the
fund manager might create a
portfolio with more exposure to
it. Holding an excess amount of
a particular security is known
as being “overweight.”A fund manager will buy
commodities—income-
producing assets like gold,
natural gas, or beef not usually
traded alongside bonds and
equities. Investing in them
can be a good way of
diversifying a portfolio.Investment
fund
A fund manager’s
objective is to create
capital growth, or
income, or both, for
their shareholders
and investors. They
assess and adjust
investments
as required.FUND MANAGER’S FEEINVESTORS’ INPUTCommodities
Property
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