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10 Cards in this Set
- Front
- Back
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What is the Investment funds trade body called? |
Investment Association |
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Key considerations for Investment |
What am I investing for - retirement, school fees, will give some direction to the type of investment that may be suitable What amount of money will I need - Over what timescale do I want Investment returns - along with the reason for investment, this will give the timescale over which investment needs to be made What risks am I prepared to take What type of assets are right for me How can I avoid Risk Do I need Income now or later |
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What is Direct Investment? |
Direct investment is when an individual personally buys shares in a company, such as in BP the oil giant. |
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What is Indirect Investment? |
Indirect investment with when an individual buys a stake in an investment fund, such as a mutual fund that invests in the shares of a range of different types of companies |
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What are some benefits of pooling of funds? |
Economies of scale Diversification Access to professional investment management Access to geographical markets, assets or classes of investment strategies that might otherwise be inaccessible to individual investors In most cases benefit of regulatory oversight from the FCA In some cases tax deferral |
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What are some disadvantages in Collective investments |
Fund managers do not manage portfolios for free, they may charge investors fees to be come involved in their collective investments There maybe annual management charges also These are to provide a profit and cover the fund managers salaries, technology research, their dealing settlement and risk management systems. There is no guarantee of the investment performance of the fund or how it will perform in comparison to similar funds or benchmarks |
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What is active management |
Active management seeks to outperform a predetermined benchmark over a specific time period |
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What is top-down in Active management |
Top-down means the manager focuses on economic and industry trends rather than the prospects of individual companies. |
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What is Bottom-Up in Active management |
Bottom-up means the analysis of a company's net assets, future profitability and cash flow, and other company-specific indicators, is a priority |
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Bottom-Up includes which four investment styles |
Growth Investing - Companies that resent opportunity for significant growth in the long term Value Investing - Shares of companies that are undervalued relevant to their current and future cash flows Momentum Investing - Shares of companies who are rising and thought is they will continue to rise Contrarian Investing - Opposite of momentum, picking shares that are out of favor and may have a hidden value |
