investment portfolios, group of investment portfolios
Participants of the investment companies pursue certain objectives, namely: obtaining the current revenue, growth capital, the simultaneous reception of incomes and capital gains, income, exempt from taxes. Each of these goals can be achieved by placing the funds in the various portfolios. The structure of the portfolios generated by the investment companies, will illustrate the scheme:
The group of investment portfolios
Income-bearing portfolios provide for the receipt of income, the value of which corresponds to the level of risk acceptable to investors. They are formed out of stock instruments generating interest and dividends in the amount of above-average level, namely:
- medium-term and long-term corporate bonds;
- money market instruments, i.e. short-term bonds increased yield;
- shares and corporate bonds in various combinations;
the short - term and long-term public debt instruments increased profitability.
Portfolios growth provide the multiplication of the invested capital at different rates and with the relevant risks. Portfolios of conservative growth consist of highly reliable securities and their composition changes slowly. For portfolios of aggressive growth in a short time acquired the fast-growing in the price of shares, the composition of which is constantly and rapidly updated. The risk of such investments is high. Portfolios of medium height combine the quality of the previous two. Special portfolios consist of securities issued in any one country or issued by companies located in certain regions, as well as relating only to the selected branches of industry. They include also the insurance portfolios, guaranteeing the average rate of capital growth with moderate risk.
Portfolios of growth and income are intended to provide to the investor multiplication of the invested capital with simultaneous obtaining of current income. Balance portfolios consist of shares and bonds. Their structure depending on the market situation is constantly changing. The close attention is paid to reliability of investments. The portfolios of dual-use are made up of two types of own shares of the investment company. Some of them provide high current income, and other capital gains. Both types of shares have equal ratings. The investor, by buying them in a variety of quantitative proportions, he sends its investment policy.
The portfolios of securities, exempt from taxes include primarily municipal bonds. Income brought by them shall not be taxed in the majority of countries that benefit investors. Not subject to taxes and income from money market instruments, in particular received on short-term securities.
Principles of the effective investment policy of the specialized non-Bank credit and financial institutions, as well as methods of reducing the risk of their activity are similar to commercial banks.
