Tiểu luận môn thị trường tài chính và các Định chế tài chính chủ Đề investment fund

BENEFITS OF INVESTMENT FUNDS COMPARED TO OTHER FINANCIAL INVESTMENT CHANNELS .... These funds, ranging from mutual funds to exchange-traded funds ETFs and hedge funds, offer investors ac

TRƯỜNG ĐẠI HỌC NGÂN HÀNG TP.HÒ CHÍ MINH

Tiểu luận môn: THỊ TRƯỜNG TÀI CHÍNH VÀ CÁC ĐỊNH CHẾ TÀI CHÍNH

CHU DE: INVESTMENT FUND Lớp học phần: FIN302_2321_10_TA_L02 - GVHD: PGS.TS ĐẶNG VAN DAN

1 Tran Ngoc Huong 050610220974

2 Nguyén Phuong Bao Ngoc 050610221137

3 Nguyén Tran Kiéu Nhi 050610221183

5 Truong Anh Thư 050610220603

6 Lâm Kim Tuyến 050610221509

Thanh phố Hồ Cí Minh, tháng 4 năm 2024

BANG PHAN CÔNG - NHÓM 3

HỌ V

Tran Ngoc Huong

Nguyên Phương Bảo Ngọc

Nguyên Tr Nhi

4_ | Quách Giang Tuy

Trương Anh Thư

Lâm Kim Tuy

TABLE OF CONTENTS

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| CONGEPT AND ROLE OF INVESTMENT FUND SH HH ren 5 Ámã t3 Ôn cn rr (4 5 1.2 ROME 5

Il TYPES OF INVESTMENT FUNDS LH SH HH HH rệt 6 2.1 Open — End and Closed — End funids .- - - ch kh ket 6 F2 ¡ch no 7

2.3 ETFs (Exchange - Traded Fund$) ch ni kh kt 8

Ill BASIC OPERATIONS OF INVESTMENT FUNDS che 8

IV BENEFITS OF INVESTMENT FUNDS COMPARED TO OTHER FINANCIAL

INVESTMENT CHANNELS SH TH TH TH TH HH HH HH 10 4.1 Professional Management 10 4.2 Diversification ec 10 4.3 High Liquidity 2.0 ee eceeceeeeeeeeeeeeeeeeeeeeeeeeseeeseeeteeeseeaeseeeseaeeeaeeeaeseaeeeaeseaeseaeseeeeaeeeateeats 11 4.4 TrANSPALeNCy ooo 11 4.5 Easy Market ACCESS ố ee 11 4.6 Comparison with other channelS ch rkệt 11

V THE DEVELOPMENT OF INVESTMENT FUNDS IN THE WORLD 0065 12 5.1 Historical Background e 12 121W 9 980 0 án 0h 13 5.3 Globalization of Investment Funnds .- - ng hy 13 1b n9) i9 An s1 nh 13 5.5 Impact on Financial Markets ec .e 14 5.6 Challenges and Opportuniti@s - - ch TH KH ky 14

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VỊ THE DEVELOPMENT OF INVESTMENT FUNDS IN VIETNAM 16 Bìa) 0= acc 21

INTRODUCTION

Welcome to the world of investment funds, where financial aspirations meet strategic allocation In an era defined by dynamic market shifts and evolving investment landscapes, the role of investment funds has emerged as a cornerstone for individuals and institutions alike seeking to navigate the complexities of wealth management These funds, ranging from mutual funds to exchange-traded funds (ETFs) and hedge funds, offer investors access to diversified portfolios, professional management, and the potential for optimized returns Join us as we delve into the multifaceted realm of investment funds, exploring their structures, strategies, and significance in today's global economy

| CONCEPT AND ROLE OF INVESTMENT FUND

1.1 Concept

An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage

In other words, investment funds are investment products created with the sole purpose of gathering investors’ capital, and investing that capital collectively through a portfolio of financial instruments

1.2 Role

Investment funds play important roles in the business world and the funds themselves can exert their will in several different ways There are different roles that investment funds have in developed countries and countries in transition In developed countries, they are the biggest investors in shares and work over management companies and thus influence the competitiveness of the economy and the diversification of risk In countries in transition, they appeared at the beginning of the transition, were the favorites, but did not lead to the expected development of the financial markets

In addition, the advantages of investment funds are well known -_ the diversification of the portfolio, portfolio management and corporate governance - are particularly current, at the present

ll TYPES OF INVESTMENT FUNDS

2.1 Open — End and Closed — End funds

Open-end funds: An open-end fund is a type of fund that is established and operates continuously for an unlimited period After the initial issuance, trading between investors will occur periodically based on the net asset value (NAV) of the

fund These transactions are usually carried out directly with the fund management company or through designated agents

Unlike closed funds, the total capital of an open fund varies with each

transaction due to its specific nature Investors in open funds have the right to resell

investment certificates to the fund, and the fund must buy back the certificates according to the net asset value at the time of transaction

on the stock market

Investors can buy or sell fund certificates on the secondary market to recover their investment The price of fund certificates may be higher or lower than the fund's net asset value

2.2 Mutual Funds

Mutual funds are the oldest type of investment fund Like the other types, they’re vehicles that pool money from investors to buy securities The basket of assets

is priced and sold to the public on a daily basis

The daily basis part is an important distinction Unlike other fund types, which

we ll discuss in a moment, the price of a mutual fund changes exactly once a day In an actively managed mutual fund, the managers may trade the assets inside the fund throughout the trading day But you can’t make money trading shares of the fund intraday

That’s part of the reason mutual funds are more popular for retirement planning They’re not good for day traders, but they’re great for savers who want to grow their money over a long period of time

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RETURNS MUTUAL FUND ã WORK FLOW ra MUTUAL FUND

GENERATE Để len Ives! COMPANY

2.3 ETFs (Exchange — Traded Funds)

An ETF is a listed security that tracks an index consisting of a portfolio of individual securities As with mutual funds, when you buy an ETF, you don’t pick a specific security Instead, you choose a particular asset class, sector, theme, country or investment strategy

The ability to trade ETFs intraday can be an advantage in some situations If the market crashes, for example, you can sell before the end of the trading day With a mutual fund, you’re stuck waiting until 4 p.m to sell, at which point the fund may have shed significant value

Finally, ETFs tend to be a bit cheaper than mutual funds They don’t have to distribute realized capital gains to shareholders, so they tend to come with a smaller tax bill Also, many ETFs are passively managed, usually means a lower expense ratio ETFs don’t have big investment minimums They’re generally more tax- efficient And you can invest in ETFs that offer leverage or even profit when markets

go down No wonder ETFs have come to dominate stock exchanges over the past

decade

Ill BASIC OPERATIONS OF INVESTMENT FUNDS

Investment funds are professional investment organizations that mobilize capital from investors to invest in various assets according to a defined strategy Here are the basic operations of investment funds

1 Capital Mobilization: Investment funds start by mobilizing capital from investors Investors contribute their money by buying fund shares or fund units

2 Management and Investment: After mobilizing capital, the investment fund

will have a large amount of money to invest The funds will focus on investing in various types of assets such as stocks, bonds, real estate, currency, and many other types of assets Investment decisions are made by fund managers, based on the strategy and investment objectives of the fund

3 Diversification: The main goal of investing is to ensure diversification of the fund's portfolio This helps reduce risk because changes in one asset can be offset by growth in other assets

4 Risk management: managers continuously monitor and evaluate the assets in

the portofolio to ensure that risks are effectively controlled and managed As the market fluctuates, the fund can make adjustments to optimize returns and reduce risk

5 Providing profits: Profits from the fund's investment will be shared among participating shareholders, based on their ownership ratio in the fund Profits can come from increasing asset prices, collecting interest or paying dividends from stocks

6 Payment and exchange of treasury shares: investors can buy additional

treasury shares or copies of treasury shares to withdraw capital Typically, investment funds have markets that are open daily to provide liquidity to investors who want to buy or sell fund shares

ati

Investors pool their money

Returns are

Mutual Fund Flow Cycle

Fund manager invests pooled

Conclusion: The basic activities of investment funds include raising capital, diversifying and managing investments, managing risks, providing profits and providing opportunities for investors to participate in the market financial markets without having to directly manage their investments

IV BENEFITS OF INVESTMENT FUNDS COMPARED TO OTHER

FINANCIAL INVESTMENT CHANNELS

Investing in funds is an interesting and attractive option besides traditional

investment channels such as gold, stocks, real estate, currencies Let's see 5 reasons below why you should choose to invest in funds

4.3 High Liquidity

e Most investment funds are highly liquid, meaning you can easily buy or sell fund units whenever needed

4.4 Transparency

e Investment funds are regulated and operate under strict guidelines

e Information about the fund's activities is regularly disclosed to keep investors informed

4.5 Easy Market Access

e With a smaller amount of money, you can participate in markets that typically require a large investment, like stock markets or real estate

4.6 Comparison with other channels

e Savings Accounts: Lower returns than investment funds, but with low risk and high liquidity

e Gold: Returns depend on gold price fluctuations, with high risk but high

liquidity

e Real Estate: Requires significant capital, has low liquidity, high risk but offers potentially high returns

e Individual Stocks: High potential returns, but also high risk and requires

investment knowledge and experience

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Conclusion: Investment funds are a suitable investment channel for many investors, especially those who are just starting out or do not have much time to research the market However, investors must pick a trustworthy investment fund that fits their financial objectives

V THE DEVELOPMENT OF INVESTMENT FUNDS IN THE WORLD

5.1 Historical Background

Investment funds, also known as mutual funds or collective investment schemes, have a long history dating back to the 18th century The concept gained momentum in the early 20th century, especially in the United States and Europe The first modern investment fund is often attributed to Massachusetts Investors Trust, established in 1924

5.2 Types of Investment Fund:

a Open - End Funds: These funds issue and redeem shares at the request of investors and are continuously offered

b Closed - End Funds: These funds have a fixed number of shares and are

traded on an exchange

c Exchange - Traded Funds (ETFs): ETFs combine features of both open-end

and closed-end funds and are traded on stock exchanges

d Hedge Funds: These are alternative investment funds that typically cater to high-net-worth individuals and institutional investors

5.3 Globalization of Investment Funds

1 Expansion: Investment funds have spread globally, reaching beyond traditional markets to regions like Asia, Latin America, and the Middle East

2 Emerging Markets: Emerging markets have become focal points for

investment funds seeking growth opportunities and diversification

5.4, Regulatory Framework

The development of investment funds has been shaped by evolving regulatory frameworks aimed at safeguarding investor interests, enhancing transparency, and promoting market stability

Regulatory bodies such as the U.S Securities and Exchange Commission (SEC) and the European Securities and Markets Authority (ESMA) play crucial roles in overseeing investment fund operations

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5.5 Impact on Financial Markets

Investment funds play a pivo tal role in capital formation, liquidity provision, and diversification of investment portfolios, contributing to the efficiency and resilience of financial markets

Their influence on asset pricing, market volatility, and investor sentiment underscores their significance in shaping global financial dynamics

5.6 Challenges and Opportunities

The proliferation of investment funds has raised concerns about systemic risks, conflicts of interest, and regulatory arbitrage, prompting ongoing debates on risk

management and market conduct

Simultaneously, investment funds continue to offer avenues for retail and institutional investors to participate in a wide array of asset classes, including equities, fixed income securities, commodities, and real estate

= The development of investment funds has been a transformative force in the world of finance, catalyzed by innovations in fund structures, market access, and technological integration This evolution has elicited significant regulatory and market responses, shaping the global investment landscape

Conclusion: The development of investment funds has been transformative, driven by global trends, technological innovations, and regulatory frameworks

Understanding their evolution is crucial for navigating the dynamic landscape of global

finance

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