Investment fund shares

Investment funds (mutual funds) are vehicles for collective investment; their shares, with the exception of management shares held by the manager, are securities to entitle the investors to a share in the performance of the fund.

Investment funds may either be created for a pre-determined strategy (such as high-yield bonds or US energy sector equity) or have the investment strategy loosely defined in favour of wide discretion of a specific investment manager.

Open-end funds are created for liquid investments where it is possible to calculate NAV (net asset value) on a daily basis and enable redemptions on demand. Funds with less liquid assets may be either interval (where redemptions are possible periodically) or closed (where redemption / distribution is not planned until a specific date).

Most funds are regulated in this or that way. The only exception is offshore private funds for qualified investors which still enjoy complete freedom from regulation in certain jurisdictions.