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Objectives And Policies

 Investment Objective 

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Each investment company has an investment objective that states what it is trying to achieve for investors and the investment area it is going to focus on. An example might be “outperform the MSCI World Index over the medium term by investing in a global multi-asset portfolio”. (‘Portfolio’ is the collective term for all the investments that the fund holds). Here the MSCI World Index will be the fund’s benchmark – a measure against which you can judge the performance of the company.

 Investment Policy

The investment policy or investment strategy describes how the manager will go about managing the portfolio. Within this, the directors may set restrictions such as how many investments the fund holds, how big the largest investments are or how much of the fund is invested in a particular country. The investment policy will also include any parameters around dividend payouts.

 Predictable

The investment company cannot change its investment objective without asking shareholders to vote on whether that is acceptable. QuotedData’s daily news service, available on our website, includes stories on events such as changes to investment policies.

Click here to go forward to the Choosing An Investment Company section
Click here to go back to the Types Of Investment Companies section
Click here to return to Investment Companies – Part One
Click here to return to Investment Companies – Part Two

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