Page 72 - FINAL CFA SLIDES DECEMBER 2018 DAY 11

Other forms of Pooled
Investments, p.106 Session Unit 12:
39. Portfolio Management: An Overview

Exchange-traded Separately Hedge funds Buyout (private Venture
funds (ETFs) managed equity) funds capital funds
account

Nature of • Several investors • Single • Limited no. of qualified investors (high • Buy (often • Investme
ownershi • Buy or Sell/ investor minimum $0.25million). with debt) nt
p/operati redeem via the from public companie
on stock exchange EXAMPLES: and take it s in start-
• Market price private, up phase
different from • Long/short funds –buys securities expected then re- with the
NAV but special to over perform the market and sell organise aim of
redemption securities expected to underperform. business, selling at
•
Equity market-neutral funds –long-short
provisions tanties pay down IPO whilst
ensure market funds with long stock positions just offset in debt, helping
price is close to value by stocks sold short, designed to ne increase the start-
NAV. neutral to profitable in both up and down value and up to
• Can be sold markets as long as the longs outperform the re-sell over ready for
short, purchased shorts. 3-5 years. IPO.
on margin and • Event-driven funds –investments triggered
traded at by one-time corporate events, e.g. M/As;
intraday prices - • Fixed-income arbitrage funds – take long
Brokerage costs and short positions in debt securities ;
apply for buying • Convertible bond arbitrage funds – take
and selling long and short positions in convertible bonds
• Passively and equity
managed to • Global macro funds funds – speculate on
match a given changes international currency and interest
index. ate rates through derivatives and great
amount of leverage!