INTM340510 - DT claims and applications: Collective Investment Vehicles

Introduction

What a Collective Investment Vehicle is

A collective investment vehicle raises capital by the sale of units or shares. Itinvests this capital to produce a return for its unitholders/shareholders. Typically thecollective investment vehicle will invest in a wide range of securities (usually shares orbonds) in one country or region, for example the United Kingdom, Europe, Japan, the FarEast.

A collective investment vehicle can be in the form of a fund, a trust (바카라 사이트˜unittrust바카라 사이트™) or a company.

Collective Investment Vehicles - Funds

The participants buy units in the fund. Fund managers invest the capital raised fromthe sale of units by purchasing, for example, shares in companies, company loan stocks orgovernment bonds. A custodian, often a bank, holds the investments in its name. Theparticipants have a proportionate share of the whole fund. So if someone invests £1,000in the fund and the fund raises £100,000 that investor has a 1% share in the fund and,after deduction of management charges, will receive 1% of the income generated by theinvestments at fund level.

Unit Trusts

In the United Kingdom and some other countries collective investment vehicles arecommonly in the form of 바카라 사이트˜Unit Trusts바카라 사이트™. The fund is in the legal form of a trust,and the custodian (usually a bank) holding the investments is the trustee. The manager ofthe trust sell units to the public and the purchasers of these units become the 바카라 사이트˜unitholders바카라 사이트™. Each unit represents a share in each of the underlying securities and,after the deduction of the manager바카라 사이트™s fees/expenses, income from the securities isdivided among the unit holders in proportion to the number of units they hold.

Collective Investment Vehicles 바카라 사이트“ Companies

Investors buy shares in the investment company. The company invests the capital raisedfrom the sale of its shares to buy shares, stocks or bonds. It uses the income it receivesfrom the investments to pay dividends to its shareholders.