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Memos from Howard Marks: Ruminating on Asset AllocationUCITS
A practical, cost-efficient way to build a diversified investment portfolio
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The Basics
UCITS funds pool investor money and buy a portfolio of stocks, bonds and other investments.
UCITS, or Undertakings for Collective Investment in Transferable Securities, are a type of mutual fund established by the European Union—making it easier for individuals to invest in many opportunities rather than just a few. The combined holdings of the mutual fund are known as its portfolio. Each share bought represents an investor’s part ownership in the mutual fund and in the gains it generates.
Various mutual funds can have different investment objectives, risks and return profiles. Typically, they specialize in an asset class, industry or theme, for example investing in real estate, infrastructure or renewable energy. While UCITS are primarily designed for sale within the EU, they are also sold in some other countries, such as Switzerland, Singapore, and Hong Kong.
Features
Potential benefits and key features of UCITS funds include:
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Professional, active management
Fund managers research and select which securities to buy and then monitor performance
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Diversification1
Typically invested in a range of securities and industries, helping lower single-stock risk
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Daily valuation and liquidity
Investors can easily redeem shares for the current net asset value (NAV)
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Lower cost
Generally, a more affordable way to invest in a wide array of stocks or bonds
1 Diversification does not ensure a profit or protect against loss.