Tap below to watch a video about packaged securities, and read on for more details.
Packaged securities are the collective term used for mutual funds, exchange-traded funds, and real estate investment trusts. These combine multiple versions of different assets into one investment opportunity that can be purchased. By owning more than one asset, you assume less risk than if you owned just one of those investments on its own.
Essentially, this is a packaged security that is made up of a collection of securities such as stocks and bonds. Investors can purchase shares in it, and that money is managed by money managers who invest the fund’s capital in order to produce capital gains for the owners (e.g. individual investors). Usually, a mutual fund’s portfolio is structured to match previously stated investment objectives.
This is a packaged security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange and as such experiences price changes when bought and sold.
REAL ESTATE INVESTMENT TRUST (REITs)
This is a packaged security that is similar to MF, except that the assets bought are land and buildings as opposed to stocks and bonds.