b. distinguish among style, sector, index, global, and stable value strategies in
equity investment and among exchange traded funds (ETFs), traditional mutual
funds, and closed end funds;
Style stategies: The funds or fund managers focus on some underlying characteristics common to various possible assets or securities of an asset.
In case of equity growth and value are very popular style strategies.
Growth strategies focus on identifying growth companies selling at high P/E ratios, but undervalued according to the analysis of the fund managers. The fund managers has expertise and confidence in his analysis of growth prospects as well as the valuation of those prospects. Growth style managers are willing to consider new companies for investing.
Value fund managers, rely on past performance to derive a value estimate, and find undervalued companies based on their valuation and then analyze whether there are serious weaknesses that disturb historical record. Value style managersl limit their analysis to companies with having a minimum number of years of existence to get historical data to analyse.
Sector investment funds focus on stocks of particular industry. ex: Pharmaceuticals, Financial industry
An index fund attempts to track an index.
An international fund invests only in foreign assets.
A global fund invests in foreign assets as well as domestic assets.
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