Measuring Performance of Investment Funds
The benefits of investment funds, where individuals from all walks of life pool their savings together, can be summed up as offering everybody - from professional or institutional investors to people with limited time, or limited investment skills or modest means - access to investment returns otherwise only available to more sophisticated investors, who are able to buy their own professional portfolio management advice. An investment fund is described as a type of financial services organisation that pools the capital paid in by many individual investors and invests it according to defined investment guidelines in specific markets and assets. Investment funds allow for equal opportunities for all investors in all investment markets. The research object of this paper is an open-end investment fund, which can be characterised as having not limited number of shares or units in circulation; it may issue new shares or units at any time. The investment company stands ready to buy back its units at their current net asset value, which is the total market value of the fund's investment portfolio divided by the number of shares outstanding. The purpose of this paper is to draw basic landmarks in understanding performance of investment funds, that is, to examine different measures that investment fund investors use to assess return (fragment of text)
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