About managed accounts

What is an executing broker
What is liquidity
What is a derivative
What is the difference between the balance and the equity
What is a managed account
What is the difference between a managed account and a managed fund?
What is an alternative investment?
Investment Universe
What you should consider
What is an executing broker

An Executing Broker is a firm that acts as a medium for buyers and sellers, earning a commission or fee on all dealings.

What is liquidity

This is the extent to which something can be converted into cash. Highly liquid assets are those that can easily be converted into cash equivalents with little change to the value of the asset. Illiquid assets are the opposite, and can include things like property and collectibles depending on the market and market assumptions.

What is a derivative

A derivative is an arrangement or product (such as a future, option, CFD, or warrant) whose value derives from and is dependent on the value of an underlying asset, such as a commodity, currency, or security.

What is the difference between the balance and the equity

Equity is the sum of all open positions (negative and positive) during an open period. This will constantly change throughout the period and gives live update to what the account stands at.

Balance is the figure after the trades are closed for the investment period. This only changes whenever there is a deposit, withdrawal, or a position being closed.

These two terms and figures are often mixed up. The difference is that the balance will not include any un-finalised transactions (e.g. open positions). For instance, the balance may show £25000 but because there’s a couple of £100 positions that are currently sitting in the positive and not being closed off, the equity is sitting at £25200 (25000+2*100).

What is a managed account

A managed account is a service where a brokerage or trading account is maintained for investments purposes and the client provides discretion to an investment –
manager to make investment decisions on their behalf.

What is the difference between a managed account and a managed fund?

The main difference is that funds are pooled from all client investments whereas accounts are separately managed for each individual client. This means that clients aren’t hinged on the overall amount of clients or client funds that are held under the investment manager.

The other differences will derive from the main difference and will dictate how each type is affected by tax, what fees are involved and how the investments are carried out. For example, funds or other pooled investments will mean that clients could generally inherit taxes that aren’t purely relevant to their investments but with managed accounts, the taxes are directly from investments in that account and it is the client’s responsibility to seek tax advice and report to the Relevant tax authority.

What is an alternative investment?

Alternative investments are generally considered to be assets that are not one of the more conventional or well-known investment types, such as equities, bonds, property or cash. ‘Alternatives’ can include a wide array of investments however; some of the better-known alternatives are foreign exchange and commodities.

Investment Universe

In the world of investment management, the words investment universe refers to a specific group of assets which are permitted in a specific investment strategy. An investment universe might be the derivatives that are included in a particular strategy,
for example : FX, CFD, Indices

What you should consider

When making investment decisions you need to consider what it is you are hoping to achieve with your investment. Every individual’s needs are different and your
investment choices should reflect your personal circumstances.
Your individual financial situation, investment goals, risk preferences, investment timeframe and individual needs are just some of the things you should consider before investing in any financial product.

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