Critically analyse the similarities and differences in the characteristics and investment objectives of: (a) Pension funds, (b) Mutual funds; (c) Hedge funds, (d) Individual/direct investment in bonds and equities

A. First we will be finding out the similarities-

Pension funds will be looking for maximization of the rate of return for their pensionholders whereas, Mutual funds will be also looking for rate of return of their mutual fund holder, Whereas hedge fund will be also looking for maximization of rate of return and they will be trying to also make an abnormal rate of return and direct investment in bonds and securities are also intended and maximization of rate of return so they all will be trying to focus upon selecting of different combination of the assets which will maximize the rate of return of portfolio.

B. There are differences in the characteristics of the investment objective of these funds because the pension funds will be looking for stable rate of return and they will be looking for uniform rate of return and they will mostly invest into the income stocks as well as the Bluechip stocks wheras Mutual funds will be highly customised in nature and they can be offered in different types of funds which will be suitable to different investors, so they can be risky or lower risky as well as Hedge funds are the privately owned type of management of securities and they will be following up with lower regulations and they will be managing the private investors money and direct investment is mostly focused at individual investment into the securities and it will be having the highest possible risk.