alternative investment

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alternative investment

Postby pradeeppdy » Thu Sep 20, 2012 4:19 pm

what is reit and mlp.and differences of mutual fund and etfs.


Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: alternative investment

Postby content.pristine » Fri Sep 21, 2012 5:16 pm

REITS (Real Estate Investment Trusts) are a type of closed-end investment company that invests in different types of diversified real estate that issues shares that are traded on a stock market.

MLP's (Master Limited Partnerships) are very similar to REITS except its legal structure is different. The MLP is the general partner and the investor is the limited partner. There are generally special tax treatments for MLPs.

Mutual Funds
Investors investing in an Index Fund buys fund units directly from the Fund
Do not incur brokerage costs
All purchases and redemptions in the same day occur at the same price
Generally dividends are reinvested
Minimum required investment is higher

Exchange Traded Funds

Investor buys the units from other investors just as they buy stocks.
Incur brokerage costs
Each purchase or sale price depends on the market price at that time. ETF’s are traded throughout the day.
Dividends are paid out to the investor
Minimum required investment is lower. Can even be a single unit.

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