THOUGHT OF THE WEEK
COLLECTIVE INVESTMENT SCHEME (PART 1)
Collective investment Schemes (CIS), are pools of funds that are managed on behalf of investors by a professional fund manager. In CIS, your money is pooled together with that of other investors, and spread over the whole range of assets within the fund.
? The term “fund,” often used interchangeably with the phrase “collective investment scheme.
? Funds may be “closed-ended” or “open-ended.
? A closed-ended fund will have a fixed authorized share capital and a fixed amount of capital in issue at any point, with relatively little flexibility in terms of adjusting this.
? An open-ended fund, in contrast, has the ability to create new shares/units to meet demand from new subscribers, and to redeem and liquidate them when there is net disinvestment.
? The assets owned by the fund are called a portfolio, and a fund manager manages them.
? A collective investment scheme invests in assets, such as bonds, equities or cash...
? Your investment in a fund is divided into shares or units, and the number of shares/ units held represent your proportionate ownership of the fund’s overall assets, and the return those assets may generate.
? The prices of these shares/units will fluctuate daily because the underlying value of the assets will rise and fall – and since the total value of the fund is divided by the number of shares/units issued, your individual stake will rise and fall to reflect this……(to be continued)
This weekly report is the copyright of NIMED Capital Ltd. (NIMED), an investment banking company licensed and regulated by the Securities and Exchange Commission (S.E.C.) of Ghana as Investment Advisers as well as the National Pensions Regulatory Authority (N.P.R.A.) as an approved Pension Fund Manager. Information and opinions herein have been compiled or arrived at based on information obtained from sources considered reliable; we therefore do not hold ourselves responsible for its completeness or accuracy. All statements of opinion, projections, forecasts, or those relating to expectations regarding future events or performance of investments represent NIMED’s own assessment and interpretation of information currently available to NIMED, which are subject to change.