Investment funds can generally be described as collective forms of investment funds where the participators (that is people who invest in these funds) are the owners of the share they have paid for. The total number of units represents the overall value of the fund; however, an asset is considered as a whole. In other words, the investor (also called participator or subscriber) participates in an investment fund by buying its units. Even though each investor is in possession of a different number of units, the overall capital of the fund is taken to be as a whole, and all the subscribers who have made payments as a communion. The units also give each possessor equal rights and all the units have the same value according to the market value of the entire fund. The total value of the fund depends on the financial markets and also on the ability of who is in charge of taking the decisions concerning the fund’s investments. This entity is represented by the Società di Gestione del Risparmio (SGR or savings management company-please see explanation). Investment funds can be "open" or "closed". In open funds, the unitholder can decide to invest in further units or ask for a refund at any time. Naturally, the amount the unitholder pays or receives depends on the market value of the units at the moment of subscription or redemption. In closed end funds, once the fund has been created and therefore all payments have been made, it is no longer possible for new investors to participate in the fund. As for a refund of the subscribed units, closed funds do not allow refunds of the invested capital until the fund’s closure or before a pre-established date.
Investment funds are classified according to the percentage of shares they hold. According to "Assogestioni", there are five macro-categories of investment funds in accordance to the "standard asset allocation"1 of their investments:

Within these macro-categories, it is possible to find a number of other distinguishing factors: there are funds that invest in single countries (Italy, France, North America), in geographic regions (Europe, US, Eastern Europe, Northern or Southern Africa, Asia); in a category of countries (industrialized or emerging nations); in currencies (the dollar or the euro); or even theme investment funds that invest in specific types of equity. As a result, we can find funds that invest in companies that belong to sectors such as renewable energy, mining, (gold, silver, palladium, etc.), or agriculture, etc.

1please see the Assogestioni table on WWW.ASSOGESTIONI.IT.

Editor: Mirko IORI

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