Values funds comprise stocks that are undervalued in the market. These funds can be mutual funds or exchange-traded funds (ETFs). Value funds follow the value investing strategy. These funds are actively managed funds by experts. These funds carefully select the value stocks that are promised to grow in prices. Even if the prices do not […]
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A Straight bond is the most basic form of bond. It comes with the most basic features associated with a bond. All other types of bonds are variants of the straight bond. It comes with no special features or variations attached to it. Bonds are debt instruments used by Governments, Municipal Corporations, Large corporate entities,
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Equity-income funds come through dividends paid on stock investments. These dividends can be in the form of common stocks or preferred stocks. Hence, equity-income funds largely comprise dividend stocks, either common or preferred stocks. Equity-income funds are mutual funds that invest in stocks with regular and established dividend history. These funds aim to offer regular
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Immunization is the process of securing someone from infectious diseases. Financial experts also use immunization strategies to secure investments against several types of risks. One such risk is the interest rate risk for investors. The interest rate risk is particularly higher for bond investors due to the inverse relation of interest rate and bond prices.
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Aggressive funds are mutual funds comprising stocks with high growth than the market average. These funds are actively managed by experts to achieve high returns on investments. Due to the fact, these growth funds carry high expense ratios as well. These funds hold individual stocks with mid-cap or small-cap holding labels. These funds carry higher
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A growth fund is a diversified portfolio of stocks with capital price appreciation as their prime objectives. Stocks in Growth funds do not pay dividends or pay little if any. They emphasize reinvesting profits into business development and growth. Value funds, mutual funds, and ETFs are prime examples of growth funds. These funds provide high-growth
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Retractable bonds are also called putable bonds or simply put bonds. These bonds come with an additional feature of put option attached with the straight bonds. The put option allows the bondholder to retract principal investment made in the bond. Bond issuers also hold the right to retract the bond in some cases. However, usually,
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Extendable bonds come with an option to extend the maturity date of the original bond. The extension can be exercised either by the bond issuer, bondholder, or both, depending on the terms specified. Extendable bonds provide flexible options to both the investor and bondholder. The arrangement can be set to exercise the extension option, once
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Eurobonds are commercial bonds that are issued in a currency other than the home currency of the issuer. The bond can be issued in the same country or a foreign country. However, the currency of the bond will be different from the issuer’s base currency. The term “euro” in the name does not specify the
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Zero-coupon bonds do not offer periodic interest payments like coupon bonds. They offer zero-interest payments periodically. The only cash inflow for the investor comes at the bond maturity through principal repayment. These bonds are issued at a deep discount to attract investors since they do not offer periodic interest payments. Definition A zero-coupon bond is
