Investment Funds
At the same legal form of investment fund may be a contract, and trust or company. Thus, in essence UCITS strongly resemble each other U.S. funds. Share of UCITS assets currently in the assets of all funds of the EU countries is around 80%. At the same time, Britain and Germany in terms of organizing the activities of investment funds in these States differ substantially from other EU countries. Investment Funds in the UK are divided into so-called unit trusts (or mutual trusts) and investment trusts. Unit trusts are, in fact, closed-end funds.
The meaning of such a fund is that the investor transfers in trust their cash contributions. Share price is determined by dividing the total value of securities held in portfolio of unit trust, the number of issued shares. With increasing demand for managers decide on the issue of new units. Unlike those institutions associated with the intricacies of legal rights. In the UK there opportunity to transfer the ownership of the money to another person, ie, after the fall of investor money in unit trust, its trustee is a so-called guardian (trustee). In the U.S., this principle does not works, so mutual funds are in the form of joint stock companies. Investment trusts, unlike unit trusts, has the right to permanently produce or buy their own shares. He has a permanent share capital, which can be changed only from time to time in connection with the adoption of the shareholders decide to increase it.
Also, in recent years to replace the unit trusts in the UK are beginning to come to open-end investment company. Investment arrangements in Germany even more specific in comparison with other countries. This is due to the special role of banks in which they play in it. According to German law equity firms are credit institutions, and they subject to all legislation relating to credit facilities. Another important characteristic of the German investment fund is the depository of their specificity – structures that are responsible safekeeping of securities and monitoring of the Management Company. Depositories of funds can only be all the same jar. As a result, in comparison with other countries in Germany through the issuance of shares funded by the markedly lower proportion of investment. By the share of capitalization to GDP (20-25%) in Germany for more than two times lower than the U.S. and five times – the UK. Most of the needs of large enterprises in long-term capital satisfy the banks. Another result of the dominant role of banks and banking legislation in Germany is that German regulation of investment companies is considered one of the most stringent in the world when it comes to legal protection of investor interests. In general, the amount of assets of public funds as a whole in the world in 2006 amounted to almost 22 trillion. dollars and the total number of such funds totaled approximately 61.5 thousand. The U.S. share of global assets under consideration funds amounted to approximately 48% share of the European Union – 35%. In Japan and other Asian countries, investment funds are underdeveloped, and the population of these countries is not so active participant in the investment process, such as in the U.S. or Western Europe. When comparing the assets of the types of funds between the U.S. and Europe can provide yet another interesting feature. If the U.S. more than half all open-end funds are equity funds, in Europe the number of equity funds is only slightly greater than the amount of bond funds and money market funds.
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