European University Association www. European Database on Medical Devices http: European Union Clinical Trials Database: European Registry of Abdominal wall Hernias www. European Network of Research Ethics Committees www. European Cancer Research www. European Surveillance of Congenital Anomalies www. European Heads of Research Councils: European Institute for Health Records www. Exome Aggregation Consortium http: Open Access Journal http: Face to face FaBI: Findable, Accessible, Interoperable, Reusable www.
Food and Agriculture Organisation der Vereinten Nationen www. Frequently asked question s FASP: Frankfurter Allgemeine Zeitung www. US Food and Drug Administration www. Federation of European Biochemical Societies www. Formalin-fixierte Paraffin-eingebettete Gewebeproben FG: Framework Programme for Research and Technology Development: Forschung und Entwicklung FuGO: Global Alliance for Genomics and Health www. Greifswald Approach to Individualized Medicine www. Nach dem peruanischen Berater Henry L.
Genome-Austria Tissue Bank www. Genome Analysis Toolkit www. German Breast Group www. German Chronic Kidney Disease Study www. Glasgow Coma Scale http: Gesellschaft Deutscher Chemiker e. German Refined - Diagnosis Related Groups www. Gesamtverband der Deutschen Versicherungswirtschaft e.
Gemeinschaft Deutscher Kryobanken e. Gesellschaft epidemiologischer Krebsregister in Deutschland e. Gendiagnostik-Kommission, angesiedelt am RKI www. Genetic bio and dataBanking: Confidentiality and protection of data. Towards a European harmonisation and policy. Integrated Database of Human Genes www. German Network of Hereditary Movement Disorders www. Zum Umgang mit genomischen Hochdurchsatzdaten: Gene Expression Omnibus www.
German Acupuncture trials www. General Formal Ontology www. Global Grid Forum www. Global Health Access Program http: Global Harmonization Task Force www. Guidelines International Network www. German Medical Technology Alliance e. General practitioner; general practice GP: Erste und bis heute bedeutsamste Open Source Softwarelizenz www. General Packet Radio Service: General Services Administration www. Google Web Toolkit http: Highly Active Antiretroviral Therapy: Health and Psychosocial Instruments www. Harmonisation for the Security of Web Technologies and Applications http: Hamburg City Health Study http: Hannover Clinical Trial Center www.
Webbasierte Patientenakte der Firma Microsoft www. Health — Exploring Complexity: An Interdisciplinary Systems Approach; Fachtagung vom Helmholtz-Gemeinschaft Deutscher Forschungszentren www. Humane Gene Mutation Database www. Healthcare Information and Management Systems Society www. Health Information Technology Standards Panel www. Human Immunodeficiency Virus HiWi: Health On the Net www. Human Phenotype Ontology www. Human Genome Organisation www. Informatics for Integrating Biology and the Bedside www. Integrated Infrastructures Initiative I3C: Interoperable Informatics Infrastructure Consortium www.
Infrastructure as a Service IAB: International Agency of Cancer Registries www. Fraunhofer Institut Intelligente Analyse- und Informationssysteme www. Internet Assigned Numbers Authority www. Integrierte Biobank Jena www. Integrated Biobank of Luxembourg www. Iberian Grid Infrastructure Conference www. International Cancer Genome Consortium http: International Committee of Medical Journal Editors www.
Internet Content Rating Association www. International Center for Telemedicine Regensburg www. International DOI Foundation www. Integrated Data Repository Toolkit: Intrusion Detection Service idw: International Electrotechnical Commission www. International non-profit organization and professional association for the advancement of technology, ursprgl.: Institute of Electrical and Electronics Engineers www. Internet Engineering Task Force www. International Federation of Pharmaceutical Manufacturers Association www. Integrating the Healthcare Enterprise www.
Investigator initiated trial IKC: Informations- und Kommunikationstechnologie ImageJ: Image Processing and Analyis in Java http: Innovative Medicines Initiative www. International Medical Informatics Association www. Portuguese National Distributed Computing Infrastructure www. International Neuroinformatics Coordination Facility www.
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Internet Protocol Version 6 IQ: International Rare Diseases Research Consortium www. Information Systems Audit and Control Association www. International Society for Biological and Environmental Repositories www. International Standard Book Number: International Standards for Cytogenomic Arrays Consortium www. Integrated Services Digital Network: International Society for Forensic Genetics www.
Fraunhofer Institut System- und Innovationsforschung www. International Organization for Standardization www. International Society for Pharmaceutical Engineering www. International Society for Pharmacoeconomics and Outcomes Research www. Integrated Safety Systems inc. International Standard Serial Number: Fraunhofer Institut Software- und Systemtechnik www. Fraunhofer Institut Toxikologie und Experimentelle Medizin www. IT Future of Medicine www. IT Governance Intstitute www. International Telecommunication Union www. International Union of Pure and Applied Chemistry www. Java 2 Platform Enterprise Edition: Journal of the American Medical Association http: Journal of the American Medical Informatics Association www.
Joint Commission on Accreditation of Healthcare Organizations www. Kommerzielle, webbasierte Software zur Fehlerverwaltung und Projektsteuerung in der Softwareentwicklung www. Journal of Medical Internet Research www. EC Joint Research Centre https: Joint Technology Initiative Jukebox: Kyoto Encyclopedia of Genes and Genomes www. Krebsinformationsdienst des DKFZ www. Krankheitsbezogenes Kompetenznetz Multiple Sklerose www. Kompetenznetz Maligne Lymphome www. Kompetenznetz Degenerative Demenzen www. KoNstanz Information MinEr www.
Kompetenznetze in der Medizin www. Kooperativer Aufbau eines Langzeitarchivs digitaler Informationen: Kooperative Gesundheitsforschung in der Region Augsburg www. Koordinierungsstelle EG der Wissenschaftsorganisationen www. Klinisches Studienzentrum Leipzig www. Klinisches Studienzentrum der MHH www. Library of Congress Classification www.
Luxembourg Centre for Systems Biomedicine www. Von der Mayo Clinic koordiniertes Projekt zur Standardisierung von Schnittstellen und Tools auf Basis eines gemeinsamen terminologischen Modells zur Vereinfachung der Nutzung bestehender Terminologien und Klassifikationen http: Wissenschaftliche und technische Vereinigung im Bereich Experimentelle Hochenergiephysik in Portugal www.
Lange Nacht der Wissenschaften in Berlin www. Logical Observation Identifiers Names and Codes www. Life Science Identifier siehe http: Life Sciences Research, bzw. MicroArray and Gene Expression www. Makros zur Auswertung Klinischer Studien: Mitglied des deutschen Bundestages MDC: Medical Device Directive der EU mdi: Medizinischer Dienst der Krankenversicherungen www. Medical Data Models https: Medical Data and Picture Exchange: Medical Dictionary for Regulatory Activities www.
Medizinmesse mit begleitendem Kongress www. Mapping of the European Research Infrastructure Landscape http: Australian Metadata Online Registry http: Mouse Genome Database www. Microarray Gene Expression Data Society , www. Medizinische Hochschule Hannover www. Medicines and Healthcare products Regulatory Agency www. Medicines Investigation for the Children of Europe: Multipurpose Internet Mail Extensions: Medical Image Processing, Analysis, and Visualization http: Massachusetts Institute of Technology http: The Medical Imaging Interaction Toolkit http: However, formatting rules can vary widely between applications and fields of interest or study.
The specific requirements or preferences of your reviewing publisher, classroom teacher, institution or organization should be applied. The E-mail Address es field is required. Please enter recipient e-mail address es. The E-mail Address es you entered is are not in a valid format. Please re-enter recipient e-mail address es. You may send this item to up to five recipients. The name field is required.
Please enter your name. The E-mail message field is required. Please enter the message. Please verify that you are not a robot. Would you also like to submit a review for this item? You already recently rated this item. Your rating has been recorded. Zwingend vorgeschrieben ist die Verwendung von Namensaktien in Deutschland zum Beispiel bei Luftverkehrsgesellschaften z. Verkauf dieser Aktien ist an bestimmte Bedingungen, normalerweise die Zustimmung der Gesellschaft gebunden.
Sie wird bis zur vollen Dividendenberechtigung von den alten Aktien getrennt notiert. Das Unternehmen das die Aktien ausgibt wird im Emissionsverfahren auch Emittent genannt. Zu der Preisermittlung gibt es Verschiedene Verfahren: In British English, the word stock has another completely different meaning in finance, referring to a bond. It can also be used more widely to refer to all kinds of marketable securities. Where a share of ownership is meant the word share is usually used in British English. The first company that issued shares is considered to be the Northern-European copper mining enterprise Stora Kopparberg, in the 13th century.
The owners and financial backers of a company may want additional capital to invest in new projects within the company. If they were to sell the company it would represent a loss of control over the company. Alternatively, by selling shares, they can sell part or all of the company to many part-owners. The purchase of one share entitles the owner of that share to literally share in the ownership of the company, including the right to a fraction of the assets of the company, a fraction of the decision-making power, and potentially a fraction of the profits, which the company may issue as dividends.
However, the original owners of the company often still have control of the company, and can use the money paid for the shares to grow the company. In the common case, where there are thousands of shareholders, it is impractical to have all of them making the daily decisions required in the running of a company. Thus, the shareholders will use their shares as votes in the election of members of the board of directors of the company.
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However, the choices are usually nominated by insiders or the board of the directors themselves, which over time has led to most of the top executives being on each other's boards. Each share constitutes one vote except in a co-operative society where every member gets one vote regardless of the number of shares they hold. Thus, if one shareholder owns more than half the shares, they can out-vote everyone else, and thus have control of the company.
A shareholder has no right to these without the company's permission, even if that shareholder owns almost all the shares. This is important in areas such as insurance, which must be in the name of the company not the main shareholder. In most countries, including the United States, boards of directors and company managers have a fiduciary responsibility to run the company in the interests of its stockholders.
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Nonetheless, as Martin Whitman writes:. Even though the board of directors run the company, the shareholder has some impact on the company's policy, as the shareholders elect the board of directors. Each shareholder has a percentage of votes equal to the percentage of shares he owns. So as long as the shareholders agree that the management agent are performing poorly they can elect a new board of directors which can then hire a new management team.
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Owning shares does not mean responsibility for liabilities. If a company goes broke and has to default on loans, the shareholders are not liable in any way. However, all money obtained by converting assets into cash will be used to repay loans, so that shareholders cannot receive any money until creditors have been paid. Financing a company through the sale of stock in a company is known as equity financing.
Alternatively debt financing for example issuing bonds can be done to avoid giving up shares of ownership of the company. Shares of stock are usually traded on a stock exchange, where people and organizations may buy and sell shares in a wide range of companies.
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A given company will usually only trade its shares in one market, and it is said to be quoted, or listed, on that stock exchange. However, some large, multinational corporations are listed on more than one exchange. They are referred to as inter-listed shares. There are various methods of buying and financing stocks.
The most common means is through a stock broker. Whether they are a full service or discount broker, they are all doing one thing — arranging the transfer of stock from a seller to a buyer. Most of the trades are actually done through brokers listed with a stock exchange such as the New York Stock Exchange. There are many different stock brokers to choose from such as full service brokers or discount brokers. The full service brokers usually charge more per trade, but give investment advice or more personal service; the discount brokers offer little or no investment advice but charge less for trades.
Another type of broker would be a bank or credit union that may have a deal set up with either a full service or discount broker. There are other ways of buying stock besides through a broker. One way is directly from the company itself. If at least one share is owned, most companies will allow the purchase of shares directly from the company through their investor's relations departments. However, the initial share of stock in the company will have to be obtained through a regular stock broker. Another way to buy stock in companies is through Direct Public Offerings which are usually sold by the company itself.
A direct public offering is an initial public offering a company in which the stock is purchased directly from the company, usually without the aid of brokers. When it comes to financing a purchase of stocks there are two ways: Buying stock on margin means buying stock with money borrowed against the stocks in the same account.
These stocks, or collateral, guarantee that the buyer can repay the loan; otherwise, the stockbroker has the right to sell the stocks collateral to repay the borrowed money. He can sell if the share price drops below the margin requirement, at least 50 percent of the value of the stocks in the account. Buying on margin works the same way as borrowing money to buy a car or a house using the car or house as collateral.
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Moreover, borrowing is not free; the broker usually charges you percent interest. Selling stock in a company goes through many of the same procedures as buying stock. Generally, the investor wants to buy low and sell high, if not in that order; however, this is not how it always ends up. Sometimes, the investor will cut their losses and claim a loss. As with buying a stock, there is a transaction fee for the broker's efforts in arranging the transfer of stock from a seller to a buyer.
This fee can be high or low depending on if it is a full service or discount broker. After the transaction has been made, the seller is then entitled to all of the money. An important part of selling is keeping track of the earnings. It is important to remember that upon selling the stock, in jurisdictions that have them, capital gains taxes will have to be paid on the additional proceeds, if any, that are in excess of the cost basis. Stock trading has evolved tremendously. Since the very first Initial Public Offering IPO in the 13th century, owning shares of a company has been a very attractive incentive.
Even though the origins of stock trading go back to the 13th century, the market as we know it today did not catch on strongly until the late s. Co-production between technology and society has led the push for effective and efficient ways of trading. Technology has allowed the stock market to grow tremendously, and all the while society has encouraged the growth.
Within seconds of an order for a stock, the transaction can now take place. Most of the recent advancements with the trading have been due to the Internet. The Internet has allowed online trading. In contrast to the past where only those who could afford the expensive stock brokers, anyone who wishes to be active in the stock market can now do so at a very low cost per transaction. Trading can even be done through Computer-Mediated Communication CMC use of mobile devices such as hand computers and cellular phones.
These advances in technology have made day trading possible. The stock market has grown so that some argue that it represents a country's economy. This growth has been enjoyed largely to the credibility and reputation that the stock market has earned. There are several types of shares, including common stock, preferred stock, treasury stock, and dual class shares. Preferred stock, sometimes called preference shares, have priority over common stock in the distribution of dividends and assets, and sometime have enhanced voting rights such as the ability to veto mergers or acquistions or the right of first refusal when new shares are issued i.
A dual class equity structure has several classes of shares for example Class A, Class B, and Class C each with its own advantages and disadvantages. Treasury stock are shares that have been bought back from the public. A stock option is the right or obligation to buy or sell stock in the future at a fixed price. Stock options are often part of the package of executive compensation offered to key executives. Some companies extend stock options to all or nearly all of their employees.
This was especially true during the dot-com boom of the mid- to late- s, in which the major compensation of many employees was in the increase in value of the stock options they held, rather than their wages or salary. Some employees at dot-com companies became millionaires on their stock options. This is still a major method of compensation for CEOs.
The theory behind granting stock options to executives and employees of a corporation is that, since their financial fortunes are tied to the stock price of the company, they will be motivated to increase the value of the stock over time. Schuldverschreibung mit Zinscoupons [Bildquelle: Schuldverschreibung, Anleihe, Rentenpapier, Obligation , international auch: Bond sind auf den jeweiligen Inhaber lautende Schuldverschreibungen.
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Dieses Recht ist in einer Urkunde Wertpapier verbrieft. Die Urkunde besteht aus Mantel und Bogen. Zinsen dienen, und gegebenenfalls einem Erneuerungsschein Talon. Die Anleihe gilt als eher risikoarme Anlageform. Die Unterscheidung von Anleihen nach ihrer Laufzeit ist rein formaler Natur, vor allem deshalb, weil es viele Mischformen mit anderen Finanzprodukten gibt s. Dies bedeutet, dass der Emittent die Anleihe vorzeitig tilgen kann.
Der Finanzmarkt hat in den letzten zwei Jahrzehnten eine Vielzahl von innovativen Finanzinstrumenten hervorgebracht, wobei Anleihen eine bedeutende Rolle gespielt haben. Juni an B verkaufen. Die meisten Anleihen notieren in Prozent des jeweiligen Nominalwerts. Die Quotierung einzelner Anleihen ist unterschiedlich. Manche Anleihen werden nach Rendite gehandelt z. In den letzten Jahren setzten sich bei immer mehr Anleihearten elektronische Handelssysteme durch. Der Marktzinssatz ist der wichtigste, gleichzeitig aber auch der volatilste Parameter zur Bewertung einer Anleihe. Das Inflationsrisiko kann durch den Erwerb von inflationsindexierten Anleihen ausgeschaltet werden.
Genusscheine Profit participation rights Abb.: Stattdessen beinhaltet der jeweilige Kurs den rechnerisch aufgelaufenen Zins. Das Prinzip eines Investmentfond [Bildquelle: Most mutual funds are open-end funds. This means that at the end of every day, the investment management company sponsoring the fund issues new shares to investors and buys back shares from investors wishing to leave the fund.
A mutual fund can also be a closed-end fund. The sponsor of a closed-end fund registers and issues a fixed number of shares at the initial offering, similar to a common stock. Investors then can buy or sell these shares through a stock exchange. The sponsor does not redeem or issue shares after a closed-end fund is launched, so the investor must trade them through a broker. An innovation, the exchange traded fund ETF combines characteristics of both open and closed end mutual funds.
An ETF usually tracks a stock index, like an index fund, but can be redeemed on demand for its underlying holdings, eliminating the discounts and premiums that are common with closed-end funds and forcing prices to remain very close to the net asset value NAV. ETFs are traded throughout the day on a stock exchange, just like closed-end funds. The net asset value , or NAV, is a fund's value of its holdings, usually expressed as a per-share amount.
For most funds, the NAV is determined daily, after the close of trading on some specified financial exchange, but some funds update their NAV multiple times during the trading day. Closed-end funds may trade at a higher or lower price than their NAV; this is known as a premium or discount , respectively. If a fund is divided into multiple classes of shares, each class will typically have its own NAV, reflecting differences in fees and expenses paid by the different classes.
Some mutual funds own securities which are not regularly traded on any formal exchange. These may be shares in very small or bankrupt companies; they may be derivatives; or they may be private investments in unregistered financial instruments such as stock in a non-public company. In the absence of a public market for these securities, it is the responsibility of the fund manager to form an estimate of their value when computing the NAV. How much of a fund's assets may be invested in such securities is stated in the fund's prospectus.
Many mutual funds divide their assets up among multiple classes of shares. All of the assets of each class are effectively pooled for the purposes of investment management, but classes typically differ in the fees and expenses paid out of the fund's assets. These differences are supposed to reflect different costs involved in servicing investors in various classes; for example, one class may be sold through brokers with a front-end load, and another class may be sold direct to the public with no load but a "12b-1 fee" included in the class's expenses.
In some cases, by aggregating regular investments by many individuals, a retirement plan such as a k plan may qualify to purchase "institutional" shares and gain the benefit of their typically-lower expense ratios even though no members of the plan would qualify individually.
Turnover is a measure of the amount of securities that are bought and sold, usually in a year, and usually expressed as a percentage of net asset value. It shows how actively managed the fund is. A caveat is that this value is sometimes calculated as the value of all transactions buying, selling divided by 2 ; i. This makes the turnover look half as high as would be according to the standard measure. Turnover generally has tax consequences for a fund, which are passed through to investors.
In particular, when selling an investment from its portfolio, a fund may realize a capital gain, which will ultimately be distributed to investors as taxable income. The very process of buying and selling securities also has its own costs, such as brokerage commissions, which are borne by the fund's shareholders. Dalbar found that the average stock fund returned 14 percent; during that same period, the typical mutual fund investor had a 5. A front-end load or sales charge is a commission paid to a broker by a mutual fund when shares are purchased, taken as a percentage of funds invested.
The value of the investment is reduced by the amount of the load. Some funds have a deferred sales charge or back-end load which is paid to the broker out of the proceeds when shares are redeemed. This is distinct from a redemption fee , which is also paid out of proceeds, but is kept by the fund. Many funds charge redemption fees when shares are sold a short time after they are purchased, to discourage investors from market timing.
Load funds are sold through financial intermediaries such as brokers, financial planners, and other types of registered representatives who charge a commission for their services. It is possible to buy many mutual funds directly from the fund sponsor, without paying a sales charge. These are called no-load funds. Some discount brokers will sell no-load funds, sometimes for a flat transaction fee or even no fee at all. This does not necessarily mean that the broker is not compensated for the transaction; in such cases, the fund may pay brokers' commissions out of "distribution and marketing" expenses rather than a specific sales charge.
Mutual funds can invest in many different kinds of securities. The most common are cash, stock, and bonds, but there are hundreds of sub-categories. Stock funds, for instance, can invest primarily in the shares of a particular industry, such as high technology or utilities. These are known as sector funds. Bond funds can vary according to risk high yield or junk bonds, investment-grade corporate bonds , type of issuers government agencies, corporations, or municipalities , or maturity of the bonds short or long term.
Both stock and bond funds can invest in primarily US securities domestic funds , both US and foreign securities global funds , or primarily foreign securities international funds. By law, mutual funds cannot invest in commodities and their derivatives or in real estate. However, there do exist real estate investment trusts, or REITs, which invest solely in real estate or mortgages, and mutual funds are allowed to hold shares in REITs.
Likewise, another type of fund, hedge funds, which are restricted to the wealthy, are allowed to invest in real estate as well as sell short and certain other practices which mutual funds may not do A mutual fund may restrict itself in other ways. These restrictions, permissions, and policies are found in the prospectus, which every open-end mutual fund must make available to a potential investor before accepting his or her money.
Most mutual funds' investment portfolios are continually adjusted under the supervision of a professional manager, who forecasts the future performance of investments appropriate for the fund and chooses the ones which he or she believes will most closely match the fund's stated investment objective. This is called active management, in contrast to indexing, in which a fund's assets are managed to closely approximate the performance of a particular published index.
Because the composition of an index changes less frequently than the condition of the market, an index fund manager makes fewer trades, on average, than does an active fund manager. For this reason, index funds generally have lower expenses than actively-managed funds, and typically incur fewer capital gains which must be passed on to shareholders.
The majority of actively managed funds usually only match the performance of the index fund, but since they have higher costs they then underperform the index funds. For this reason, many advisors strongly suggest avoiding mutual funds. Mutual funds are corporations under US law, but they are subject to a special set of regulatory, accounting, and tax rules. Unlike most other types of corporations, they are not taxed on their income as long as they distribute substantially all of it to their shareholders.
Also, the type of income they earn is often unchanged as it passes through to the shareholders. Mutual fund distributions of tax-free municipal bond income are also tax-free to the shareholder. Taxable distributions can either be ordinary income or capital gains, depending on how the fund earned it. Picking a mutual fund from among the thousands offered is not easy. The following is just a rough guide, with some common pitfalls. In September , the US mutual fund industry was beset by a scandal in which major fund companies permitted and facilitated "late trading" and "market timing".
In the United Kingdom the term "mutual fund" may be confusing due to the existence of building societies and mutual life companies which in law are owned by their members and which have no share holders to distribute profits to and consequently are referred to as "mutuals". Collectively managed funds are referred to by type, and the following are the principal ones are available:. Tax favoured products such as Pensions or Individual Savings Accounts may include any of the above, although separate Pension funds and subject to involved differences Life Insurance funds exist with their own legislative control and tax treatment.
Thus it is felt by these critics that these mutual funds are useless, or more specifically, since any particular fund has a greater chance to underperform, it is better to invest in index mutual funds, or other forms of investments such as index funds. There is also other criticisms levied against mutual funds as a consequence of the first criticism. One critique covers the concept of the sales load, an upfront or deferred fee as high as 8. Firstly, some critics do not believe that this should be charged on a percentage basis instead of a flat fee basis.
Secondly this payment for advice and other services seems dubious to these critics because with so many mutual funds underperforming, but yet visibly attracting money, the advice given seemingly would be bad advice. Mutual funds are also seen by some to have a systemic conflict of interest with regards to their size. Fund companies typically make money by charging a management fee of anywhere between 0. Although theoretically this could incent them to cause the fund to perform well, since a well performing fund would caused the amount invested in the fund to rise and thus increasing the fee earned, it also could incent the fund to focus on attracting more and more new investors, as the new investors adding money to the fund would also cause the assets of the fund to increase.
Many investors like Warren Buffet believe however that the larger the pool of money one works with, the harder it is to invest. Thus the harder it becomes for the mutual fund to perform well. Thus a fund company can be focused on attracting new customers, hurting its existing customer's performance.
A great deal of the funds costs are flat and fixed costs, such as the salary for the manager. Thus it is economically more beneficial to the fund to try and allow it to grow as large as possible, instead of closing it to new investors and starting a new fund. Other practices of mutual funds have been critized from time to time, such as funds allowing market timing. More recent criticisms have focused on the fund managers accept extravegant gifts such as a jetsetting bachelor party with midget entertainment in exchange for trading stocks through certain investment banks, who presumably overcharge the fund compared to what another, non gifting investment bank would charge.
So spekulieren Hedge Funds [Bildquelle: The concept of a "hedge fund" is relatively simple. The hedge fund manager is the general partner and the investors are the limited partners. The funds are pooled together in the partnership and the general partner hedge fund manager makes all the investment decisions based on the strategy the hedge fund manager has outlined in their offering documents. In return for managing these funds, the hedge fund manager will receive a management fee and an incentive fee. The fee structures of these limited partnerships U.
Offshore hedge funds are usually domiciled in a tax haven and are designed for U. In this structure the manager will also receive a management and incentive fee and will also be invested in the fund as an investment manager. The typical hedge fund asset management firm includes both the domestic U. This allows hedge fund managers to attract capital from all over the world. Both funds will trade 'Pari-passu' based on the strategy outlined in the offering documents.
The industry continues to grow with insitutional investors increasing their allocations to hedge funds as a way to achieve absolute returns. One common hedge strategy is to buy shares of a company that is in the process of a merger and acquisition. The company's stock has an announced price that it will be worth on the date of the merger, so if the stock is under that value prior to the merger, it is a safe investment to purchase the stock and wait.
This strategy can be risky, as there is a possibility that the merger will not go through and the stock will be left at its current value. Frequently, the trader will also sell the stock of the acquiring company in addition to buying the stock of the target. Most of the early hedge funds did just this. They became very popular as a way of seeing gains better than the investment grade bond market, while still having low risk. However the side effect of this popularity was to dramatically increase the interest in all of the non-standard investment strategies, and soon other funds were being set up with new strategies aimed primarily at high growth.
Although there is no hedging in these cases, the term is still used for these funds as well. Hedge funds use alternative strategies such as selling short, arbitrage, trading options or derivatives, using leverage, investing in seemingly undervalued securities, trading commodity and FX contracts, and attempting to take advantage of the spread between current market price and the ultimate purchase price in situations such as mergers. They can be extremely risky investments as illustrated by the example of Long-Term Capital Management.
Investment companies registered with the U. Securities and Exchange Commission SEC are subject to strict limitations on the short-selling and use of leverage that are essential to many hedge fund strategies. For this and other reasons, hedge funds elect to operate as unregistered investment companies. For the funds, the trade off is that they have fewer investors to sell to, but they have few government imposed restrictions on their investment strategies. The presumption is that hedge funds are pursuing more risky strategies, which may or may not be true depending on the fund, and that the ability to invest in these funds should be restricted to wealthier investors who are presumed to be more sophisticated and who have the financial reserves to absorb a possible loss.
A special type of investment vehicle called a fund of funds , a fund which invests in other hedge funds rather than trading assets itself. Hedge funds are similar to private equity funds, such as venture capital funds, in many respects. Both are lightly regulated, private pools of capital that invest in securities and compensate their managers with a share of the fund's profits. Most hedge funds invest in very liquid assets, and permit investors to enter or leave the fund easily. Private equity funds invest primarily in very illiquid assets, such as early-stage companies and consequentially, investors are "locked in" for the entire term of the fund.
Like Hedge funds, mutual funds are pools of investment capital. However, mutual funds are highly regulated by the SEC. One consequence of this regulation is that mutual funds cannot compensate managers based on the performance of the fund, which many believe dilutes the incentive of the fund managers to perform.
As private, lightly regulated partnerships, hedge funds do not have to disclose their activities to third parties. This is in contrast to a fully regulated mutual fund or unit trust which will typically have to meet regulatory requirements for disclosure. The hedge funds are typically domiciled in an offshore jurisdiction, e. Bermuda, Cayman Islands, Virgin Islands, where regulation of investment funds permits wider powers of investment. Hedge funds have to file accounts and conduct their business in compliance with the less onerous requirements of these offshore centres.