4 Mutual Funds - Comm367 1 Mutual Funds and the I...

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Unformatted text preview: Comm367 1 Mutual Funds and the I nstitutional Environment Comm367 2 Institutional Investors Type of Investor Risk Tolerance Individual and personal trusts Life cycle Mutual funds Variable Pension funds Depends on proximity of payouts Endowment funds Generally conservative Insurance companies Conservative Banks Variable Comm367 3 Constraints in Portfolio Management u Liquidity u Investment horizon u Regulatory constraints (institutional investors) – The prudent person law – Limits on foreign holdings – Limits on individual firm holdings Comm367 4 Services of Investment Companies u Administration & record keeping u Diversification & divisibility u Professional management u Reduced transaction costs u Increased investment opportunities Comm367 5 Net Asset Value u Used as a basis for valuation of investment company shares – Selling new shares – Redeeming existing shares u Calculation: ding tan Outs Shares s Liabilitie Assets of Value Market NAV- = Comm367 6 Types of Investment...
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This note was uploaded on 08/03/2011 for the course ECON 503 taught by Professor Motherfucker during the Spring '11 term at Aarhus Universitet.

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4 Mutual Funds - Comm367 1 Mutual Funds and the I...

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