Firm in Investment In the field of investment, a firm is typically an investment firm, a subsidiary, or a division that is showcased to the public as a separate business entity. This distinct business entity could be a unit, division,…

Investment Management: Team vs Individual Approach Investment decisions are often made collectively by teams rather than individuals. This trend is evident in the 2021 statistic that 64% of all US active mutual funds were managed by teams, as reported by…

Indexes for Index-Based Strategies There are a number of key factors an investor should consider when selecting an appropriate benchmark for an equity portfolio. Benchmarks are crucial for measuring performance, guiding investment decisions, and ensuring accountability. The following explore the…

Management of Equity Portfolios The management of equity portfolios is a significant topic in the investment community, with two primary strategies being index-based and active management. However, the choice between these two approaches is not strictly binary. Instead, equity portfolios…

Fixed-Income Investment Strategies Fixed-income investment strategies are a crucial part of wealth management. These strategies often involve the construction of a portfolio that is either “laddered”, “bullet”, or “barbell”. A laddered portfolio evenly distributes the bonds’ maturities and par values…

Interest rate immunization Interest rate immunization is a financial strategy used to manage the risk associated with changes in interest rates. It is applicable to both single and multiple liabilities, assuming that the cash flows are of Type I, where…

LDI is a strategic approach to managing the relationship between an entity’s assets and its liabilities. The focal point is not maximizing returns per se, but ensuring that the entity can meet its future obligations under varying market conditions. By…

Investment Policy Statement (IPS) An IPS is a document that outlines the client’s unique investment objectives, risk tolerance, time horizon, and other constraints. It serves as a guiding framework for wealth managers to construct and manage investment portfolios tailored to…

Taxes and Their Impact on Investment Decisions Taxes significantly influence an investor’s net returns and wealth accumulation. Different jurisdictions employ various tax systems (e.g., progressive or flat) and apply different tax treatments to income components such as interest, dividends, and…

Large Institutional Investors Large institutional investors are entities that manage and invest capital on behalf of their clients. These clients could range from individual investors seeking long-term capital growth to organizations with financial obligations. Unlike individual investors who invest their…