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The Handbook of Professionally Managed Assets: A Definitive Guide to Profiting from Pooled Investments

Book Description

This practical guide provides a comprehensive overview of professionally managed assets, or investments in which all portfolio decisions and rebalancing are delegated to a fund manager or third-party advice service. Savvy investors looking to achieve a better understanding of the nuances, benefits, and drawbacks of using these products will find the answers they are looking for in The Handbook of Professionally Managed Assets, no matter whether they would like to learn more about mutual funds or hedge funds.

There is a considerable lack of knowledge among the investing public about how to properly construct a well-diversified portfolio of investments that includes a selection of professionally managed assets. As a long-standing financial planner, attorney, and educator, Keith Fevurly remedies this issue in The Handbook of Professionally Managed Assets by clearly presenting the major categories of professionally managed assets and revealing the best tactics for investing in these vehicles. Along the way, he reveals each asset's risks and rewards, and he also provides the in-depth knowledge and information investors need to confidently select the right assets for their portfolios.

Filled with valuable insights for everyone from financial professionals to individual investors, The Handbook of Professionally Managed Assets stands alone in its ability to shed light on the many investment vehicles that fall under the larger umbrella of professionally managed assets. With topics as wide-ranging as mutual funds, closed-end funds, unit investment trusts, exchange traded funds, hedge funds, managed futures, and more, this invaluable resource will give you the information you need to build a prosperous financial future for yourself and your clients.

What you'll learn

Among other topics, The Handbook of Professionally Managed Assets will cover:

  • Why financial advisors and sophisticated individual investors should use professionally managed assets as part of an overall investment strategy.

  • Mutual funds, including the history of their growth in the financial industry and the differences between actively and passively managed mutual funds.

  • The proper use of Unit Investment Trusts (UITs), particularly in the context of municipal bond trusts, which is the primary asset included in a UIT.

  • Who invests in hedge funds, including whether or not you should decide to invest in hedge funds as a self-directed investor.

  • Why managed futures are great assets to include in a risk-mitigating investment strategy for high-worth clients.

  • And much more.

Who this book is for

Designed specifically for professional investment advisors and sophisticated individual investors, The Handbook of Professionally Managed Assets will answer the myriad of questions financial professionals have about everything from mutual funds to managed futures.

Table of Contents

  1. Title Page
  2. Apress Business: The Unbiased Source of Business Information
  3. Dedication
  4. Contents
  5. Foreword
  6. About the Author
  7. About the Technical Reviewer
  8. Acknowledgments
  9. PART I: An Overview of Professionally Managed Assets
    1. CHAPTER 1: Understanding Professionally Managed Assets
      1. The Definition of a Professionally Managed Asset
      2. The Ownership and Positioning of Professionally Managed Assets
      3. Self-Directed Investment Accounts
      4. Life Cycle Investing
      5. Types of Professionally Managed Assets
      6. Open-End Investment Companies (Mutual Funds)
      7. Closed-End Funds
      8. Unit Investment Trusts (UITs)
      9. Exchange-Traded Funds (ETFs)
      10. Hedge Funds
      11. Managed Futures
      12. Private Equity Funds
      13. Limited Partnership Investments
      14. Real Estate Investment Trusts (REITs)
      15. Individually Managed Accounts (IMAs) and Separately Managed Accounts (SMAs)
      16. Variable Life Insurance
      17. Variable Annuities
    2. CHAPTER 2: Why Professionally Managed Assets?
      1. Individual Investing
      2. Lack of Investor Time and Expertise
      3. Lack of Diversification in Individual Securities
      4. Higher Transaction Costs in Individual Securities
      5. Difficulty of Effective Stock Picking
      6. The Advantages of Professionally Managed Assets
      7. Increased Diversification
      8. The Ability to Access Professional Management at a Relatively Low Cost
      9. The Ability to Participate in Preferred Investments
      10. Owner Liquidity
      11. Government Oversight
      12. The Disadvantages of Professionally Managed Assets
      13. Fees
      14. Less Control Over the Recognition of Taxable Income
      15. The Inability to Customize a Portfolio
      16. Managed-Money Investment Vehicles in Today’s Marketplace
  10. PART II: Mutual Funds
    1. CHAPTER 3: The Growth of Mutual Funds
      1. Trends in Mutual Fund Investing
      2. Who Owns Mutual Funds?
      3. Why Own Mutual Funds?
      4. Where Are Mutual Funds Owned?
      5. Types of Mutual Funds
    2. CHAPTER 4: Long-Term Investing in Mutual Funds
      1. The Principle of Diversification
      2. Index Mutual Funds
      3. Practical Considerations in Mutual-Fund Investing
      4. Mutual-Fund Investment Strategies
      5. The Determination of Which Mutual Fund Shares are Redeemed
    3. CHAPTER 5: Mutual Fund Performance Measures and Selection Criteria
      1. Category, Investment Style, and Portfolio of Sample Funds
      2. Performance Measures
      3. Ratings and Risk Measures
      4. Fund Management
      5. Fund Expenses and Fee Level
      6. Fund Tax Efficiency
  11. PART III: Other Professionally Managed Assets under the 1940 Act
    1. CHAPTER 6: Closed-End Funds
      1. What Is a Closed-End Fund?
      2. Who Should Purchase a Closed-End Fund?
      3. What Selection Criteria Should Be Used before Purchasing a Closed-End Fund?
      4. How to Evaluate the Performance of a Closed-End Fund
    2. CHAPTER 7: Unit Investment Trusts
      1. What Is a Unit Investment Trust?
      2. Who Should Purchase a Unit Investment Trust?
      3. What Selection Criteria Should Be Used before Purchasing a Unit Investment Trust?
      4. How to Evaluate the Performance of a Unit Investment Trust
    3. CHAPTER 8: Exchange-Traded Funds
      1. What Is an Exchange-Traded Fund?
      2. Who Should Purchase an Exchange-Traded Fund?
      3. What Selection Criteria Should Be Used before Purchasing an Exchange-Traded Fund?
      4. How to Evaluate the Performance of an Exchange-Traded Fund
      5. Summary
  12. PART IV: Professionally Managed Assets for High-Net-Worth Investors
    1. CHAPTER 9: Hedge Funds
      1. What Is a Hedge Fund?
      2. More on the Investment Strategies of Hedge Funds
      3. Advantages of Hedge Funds
      4. Disadvantages of Hedge Funds
      5. Who Should Purchase a Hedge Fund?
      6. What Selection Criteria Should Be Used before Purchasing a Hedge Fund?
      7. How to Evaluate the Performance of a Hedge Fund
    2. CHAPTER 10: Managed Futures
      1. Futures, Futures Contracts, and Futures Markets
      2. What Is a Managed Futures Fund or Program?
      3. Advantages of Managed Futures
      4. Disadvantages of Managed Futures
      5. Who Should Participate in a Managed Futures Fund or Program?
      6. What Selection Criteria Should Be Used before Including Managed Futures in a Portfolio?
      7. How to Evaluate the Performance of a Managed Futures Fund or Program
    3. CHAPTER 11: Private Equity Funds
      1. Private Equity
      2. What Is a Private Equity Fund?
      3. Advantages of Private Equity Funds
      4. Disadvantages of Private Equity Funds
      5. Who Should Invest in Private Equity Funds?
      6. What Selection Criteria Should Be Considered before Investing in a Private Equity Fund?
      7. How to Evaluate the Performance of a Private Equity Fund
  13. PART V: Alternative Professionally Managed Assets
    1. CHAPTER 12: Limited Partnerships and Real Estate Investment Trusts
      1. Private Limited Partnerships
      2. Public Limited Partnerships
      3. What Is a Master Limited Partnership (MLP)?
      4. Advantages and Disadvantages of MLPs
      5. Disadvantages of MLPs
      6. Who Should Invest in MLPs?
      7. What Selection Criteria Should Be Considered before Investing in an MLP or MLP Fund?
      8. How to Evaluate the Performance of MLPs
      9. What Is a Real Estate Investment Trust?
      10. Advantages of REITs
      11. Disadvantages of REITs
      12. Who Should Invest in REITs?
      13. What Selection Criteria Should Be Considered before Investing in a REIT?
      14. How to Evaluate the Performance of REITs
    2. CHAPTER 13: Individually and Separately Managed Accounts
      1. Fee-Based Advisory Account
      2. Individually Managed Account
      3. What Is a Separately Managed Account?
      4. Advantages of SMAs
      5. Disadvantages of SMAs
      6. Who Should Invest by Means of an SMA?
      7. What Selection Criteria Should Be Used in Structuring an SMA?
      8. How to Evaluate the Performance of SMAs
  14. PART VI: Managed Assets and Life Insurance Companies
    1. CHAPTER 14: Variable and Variable Universal Life Insurance
      1. Universal Life Insurance
      2. Variable Life
      3. What Is a Variable Universal Life Insurance Policy?
      4. Advantages of VUL
      5. Disadvantages of VUL
      6. Who Should Purchase a VUL Policy?
      7. What Selection Criteria Should Be Used in Purchasing a VUL policy?
      8. How to Evaluate the Performance of VUL Policies
    2. CHAPTER 15: Variable Annuities
      1. Immediate Fixed Annuity
      2. Equity-Indexed Annuity
      3. Longevity Insurance Annuity
      4. Deferred Income Annuity
      5. What Is a Deferred Variable Annuity?
      6. Advantages of a Variable Annuity
      7. Disadvantages of a Variable Annuity
      8. Who Should Purchase a VA?
      9. What Selection Criteria Should Be Used in Purchasing (or Maintaining) a VA?
      10. How to Evaluate VA Performance
      11. Comparison of VA Performance with Mutual Funds
  15. PART VII: Summary
    1. CHAPTER 16: Summary of the Present and Future of Professionally Managed Assets
      1. The Future of Professionally Managed Assets
  16. Glossary: Glossary
  17. Index