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Fund accounting - types of funds - Coggle Diagram
Fund accounting - types of funds
Mutual funds
These pool together the funds of several investors in order to invest these funds in specific markets
Can be either open eded or closed ended
Equity funds
Invest in equities commonly through the purchasing of company stocks which are publicly traded on an exchange such as LSE or NY stock exchange
Fixed income funds
Investment in corporations or governments by way of loan, for which they receive an agreed amount of interest on regularly agreed dates for a set period of time
Income earned is guaranteed and tends to generate lower returns than equity funds
Governments issue T Bills in return for motives received which detail the coupon rate of interest payable and the duration
Money market funds
A type of feed income fund that is open ended and invests solely in short term securities, primarily treasury bills and certificates of deposits
Hedge fund
A hedge fund is targeted more towards sophisticated investors with substantial sums available to invest
Focus on investing in less conventional and arguably riskier products such as alternative investments
Have diversified portfolios and flexible investment strategies with the aim of generating high returns for the investor
Investors tend to be HNWI or institutional investors
PE funds
Investment schemes funded through substantial amounts of pooled capital obtained from institutional investors such as pension funds, insurance companies and HNWI
Remain active for set periods of time in order to generate returns for the investor, commonly referred to as the internal return of reurn
IRR is the measure of performance for a PE fund
Exist in order to identify specific business opportunities which will increase their investment portfolio, generate high yields for the investors and obtain strategic business advantage
Most common way of doing this are through buyouts or acquisitions of privately owned companies, restructuring or mergers
Assets of PE funds tend to be considerable, often extending to nine or ten figures
Real estate funds
Investment in commercial and resi buildings
Can be held for the purpose of generating a regular income by way of rent or by the development of the investment properties with the aim of eventually selling for a significant profit
Different to infrastructure funds in that infrastructure funds typically invest in larger, longer term governmental infrastructure projects such as transport systems (roads, railways, airports)