What is the difference between collective investment funds and investment portfolios?
Investment fund:
It is a collective investment system that aims to collect funds from investors for the purpose of investing on their behalf in various fields according to the principles of professional management of collective investment. It is managed by the fund manager for a set fee and usually targets people who do not have sufficient financial resources to build a financial portfolio.
There are types of investment funds, the most important of which are the open fund and the closed fund. They vary according to the nature of the activity of each fund, such as the investment fund in securities, the private equity fund, the money market fund, the debt instrument fund, a real estate fund, a holding fund, and an income-generating real estate fund (working).
Investment funds are characterized by low risks, and they are suitable for those who have no necessary experience and knowledge of securities activities or do not have enough time to follow them.
Investment portfolio:
It is an account opened for a client with a company licensed to manage investment portfolios, and it includes cash, securities, units in a collective investment fund, or other assets owned by the client. The investment portfolio is either a portfolio or managed by the portfolio manager or by the client.
It is an investment tool composed of multiple financial assets, of different types and maturity date, that requires investing large amounts. It differs from collective investment funds in that it is more broad and diversified and may include, in addition to financial assets (stocks, bonds, …) real assets (real estate, gold, …).
There are many types of investment portfolios, including regular return (income), profit portfolios (growth), profit and return (combined), conservative portfolios, and high-risk portfolios.
The investment portfolio is all the securities owned by the investor, and is characterized by risk reduction a long with a stable return by following a rational and comprehensive investment policy.
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