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Closed End funds Exchange- Traded Funds Venture Capital Funds Private Equity Funds Real Estate Investment Trusts Fund Description A fund that issues shares and uses the funds to invest in securities in a particular industry or country

Finance Dec 27, 2020

Closed End funds Exchange- Traded Funds Venture Capital Funds Private Equity Funds Real Estate Investment Trusts Fund Description A fund that issues shares and uses the funds to invest in securities in a particular industry or country. This type of fund does not allow new investors after the initial share offering. o A fund that seeks to mirror the performance of a particular stock index. The fixed number of shares of this type of fund are often traded on a stock exchange. O o A fund that solicits money from wealthy individuals and institutions (with a large required minimum investment) and invests the funds in a diversified portfolio of companies. O o 0 o o A fund that purchases the majority (or entire) stakes of businesses using pooled funds from individuals and institutions, with the goal of improving the performance of acquired companies. O o O A dosed fund that focuses on investments in real estate and mortgages. This type of fund usually allows smaller investors and requires low minimum investments O

Expert Solution

Let us look at definitions of various types of funds

Closed end fund: A fund that raises money through an IPO and then list shares on exchange. As he name suggest this has fixed number of shares and hence limited investors.

Exchange traded funds: It is a basket of securities which trade on exchange similar to a stock. An index fund is made to mimic a particular index.

Venture capital funds: Thee invest in start ups and early stage companies and expect them to grow for longer term profits.

Private equity funds: These take money from institutional investors (wealthy and high profile) in large sums and hen invest in diversified equities and debts instruments

Real Estate Investment Funds: These fund invest in real estate

Now matching table:

1. Fund that issues shares and invest in security in various company. This doesn't allow new investors after IPO. - Closed end fund

Reason: As seen from definition, closed end fund has limited investors during IPO and no new investors are allowed after IPO

2. Fund which mirror the performance of an index and is traded on exchange - Exchange traded fund

Reason: This is as per definition of the fund that these funds are traded on exchange

3. Fund which solicits money from wealthy individuals and institutions and invests in diversified portfolio - Private Equity Fund

Reason: These funds are not available to everyone and only large sums of money is invested by institutions.

4. Fund that purchase majority stakes of business using pooled money with the goal of improving performance of acquired companies - Venture capital fund

Reason: Venture capitalist people invest in start ups and expect them to grow for long term gains.

5. Fund that focuses on investments in real estate and mortgages - Real estate investment fund

Reason: Only these funds focuses purely on investing in real estate

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