Title : managed and unmanaged

investment companies.
Name: shella “amirzad”
Father/Name: alef beg

2/10/2020
Session: BBA7 semester
Id:k1f17bba0077

1
Management investment company

Definition : the investment companies are the non finance banking

companies that are

Investment company is a company that issues securities and is primarily

engaged in the business of investing in securities.
An investment company invests the money it receives from investors
on a collective basis, and each investor shares in the profits and losses .
Management investment companies can manage both open-end funds
and closed-end funds.
Open-end funds do not have a designated number of shares available
for trading ; closed –end funds offer a specific number of shares to the
market .

Open –end funds

Open-end mutual funds are known to offer a range of share classes.
Open-end management investment companies structure share classes
with different fees that investors must pay when transacting with an
intermediary .open –end funds do not trade on a market
exchange ;they’re transacted through the mutual fund
company .transactions are processed at the fund’s next reported net
asset value ,also known as the forward price.
Closed-end funds
They offer a specific number of shares to the market in an initial public
offering . closed –end fund trade daily on exchanges. They are known to
trade at a discount or premium to their NAV.
\Real example of managed investment companies
blackRock
AUM: $6.84 trillion
Blackrock in not just the world’s largest asset manager, but one of the
world’s largest financial institutions. The company was founded in 1988
and went public in 1999. The firm has been influential in advancing the
growth of exchange traded funds ,through its ishares products .ishares
now comprise more than a quarter of blacrock’s assets under
management.

The vanguard group

AUM: $6.2 trillion
Vanguard has become synonymous with the strategy of passive
investing. In which money is placed in mutual funds designed to mirror
the activity of specific indexes or the broader stock market. Vanguard
boasts of low expense ratios for most of its funds. In addition to asset
management ,vanguard offers brokerage services, financial
planning ,annuities ,and other services.

Investment example
Let us say ,Mr .X has purchased 100 share of Amazon on the 14 of june
2019 at $1859 .so mr x had to spend 100*1859,i.e, $185,900.at the
price went up on the 1 of july 2019 ,he decides to sell them at the end
of the day at the closing price of $1922.19 and receives
100*1922.19 ,ie,$192219 gain in the above transaction =192219-
185900=6319.
Let us say mr ,x has purchased 100 shares of amazon on the 7 of may
2019 at 1939.99 .so mr, x had to spend 100* 1939.99.i,e. 193,999. As
the price went up on the 1 of july 2019, he decides to sell them at the
highest price of $1929.82 and receives 100*1929.82.i.e. $192983.
Loss in the above transaction=$192982-193999=1017$.

Unmanaged investment company

An “unmanaged investment company “ is one that is dedicated to
following a representative average . the need for such firms has arisen
because of the tremendous growth in investment firms to the point
that the average investor has difficulty finding a firm that can do better
than market average .with the rise in open end mutual funds,
investment firm assets rose from $1,062million in 1940 to$9,924
million in 1957. The finding to date indicate that ,on average ,however,
these funds have provided performance that is inferior to the broad
stock indexes .

What is the main differences between managed and non

managed investment
Managed investments:
if your planning on buying a business as a managed investment ,you are
looking for a commercial opportunity to invest your money where
there is greater flexibility than a more traditional investment
option ,such as share or bonds. You also have the potential to have
more input over the terms of your investment , which can result in
greater returns down the line.
There is also the unique advantage of being involved in an industry or
riche that you personally associate with and that aligns with your goals,
and interests. You will enjoy the benefits of owning a business ,or a part
thereof ,and have someone managing this for you rather than actually
working in the business on day to day basis.
Non managed investments
If your buying a business as an owner operator or a non management
investment , are you ready to roll up your sleeves and work hard? It is
an exciting time –you will be your own boss ,you will most likely be
doing something that you are passionate about and you will thrive on
the freedom and flexibility this brings. It has the potential to become
one of the most rewarding things you will ever do and you have no real
limit to how successful you can be.

Respectfully :your student shella “amirzad”