Investment & portfolio management
INTEREST-BEARING SECURITIES AND THEIR ROLE IN PORTFOLIO MANAGEMENT
Introduction
Investment management is the professional asset management of various securities (shares, bonds and other securities) and other assets (e.g., real estate) in order to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations, charities, educational establishments etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds or exchange-traded funds)
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)
Bonds, notes, mortgages, debentures, certificates of indebtedness, equipment trust certificates, and other evidences of debt, that yield interest, as contrasted with equity securities, such as preferred stocks, common stocks, and other evidences of ownership, that yield dividends and other distributions. Interest and dividends differ in their strength of claim, interest being a fixed charge which if not paid entitles the creditors to legal recourse in event of default; whereas dividends are not fixed charges, being dependent upon availability of funds therefor as well as decision by the management of the entity whether or not to pay dividends.
An interest-bearing instrument is a claim against the issuer of the loan. The yield is usually the interest rate paid to the owner of the security. There are different kinds of interest-bearing instruments, depending on the issuer of the instrument, the collateral the issuer has for the loan, its maturity and the details of how and when interest is to be paid. The interest (coupon) is normally paid on a bond on a yearly basis. For some bonds, the interest is paid only once and at the end of the bond’s maturity, i.e. on the redemption date. The latter kind of bond is called a zero-coupon bond. Another kind of
Introduction
Investment management is the professional asset management of various securities (shares, bonds and other securities) and other assets (e.g., real estate) in order to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations, charities, educational establishments etc.) or private investors (both directly via investment contracts and more commonly via collective investment schemes e.g. mutual funds or exchange-traded funds)
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)
Bonds, notes, mortgages, debentures, certificates of indebtedness, equipment trust certificates, and other evidences of debt, that yield interest, as contrasted with equity securities, such as preferred stocks, common stocks, and other evidences of ownership, that yield dividends and other distributions. Interest and dividends differ in their strength of claim, interest being a fixed charge which if not paid entitles the creditors to legal recourse in event of default; whereas dividends are not fixed charges, being dependent upon availability of funds therefor as well as decision by the management of the entity whether or not to pay dividends.
An interest-bearing instrument is a claim against the issuer of the loan. The yield is usually the interest rate paid to the owner of the security. There are different kinds of interest-bearing instruments, depending on the issuer of the instrument, the collateral the issuer has for the loan, its maturity and the details of how and when interest is to be paid. The interest (coupon) is normally paid on a bond on a yearly basis. For some bonds, the interest is paid only once and at the end of the bond’s maturity, i.e. on the redemption date. The latter kind of bond is called a zero-coupon bond. Another kind of