Subjects of the securities market
Topic 1. Concept, structure and participants of the securities market
The subjects of the RCB are:
Issuers,
Private and institutional investors,
RZB professional participants,
Self-regulatory organizations professional participants RZB,
Government bodies regulating the securities market.
Issuer - entity or government agency issuing securities and bearing on their own behalf an obligation on them to the holders.
Investor- legal or individual purchasing securities on its own behalf and at its own expense.
Institutional investor- an organization that, by the nature of its activities, has a significant balance of temporarily free cash resources that are invested in securities:
Insurance companies;
Pension funds;
Charitable foundations;
Investment companies;
Professional participants RZB are: financial brokers, dealers, depositories, registrars, settlement (clearing) organizations, trustees, trade organizers.
Self-regulatory organization of professional participants of the RZB is membership based non-profit organization, created by professional participants of the RZB and carrying out its activities on the basis of a license.
The goals of the self-regulatory organization are:
Development and improvement of the system of functional regulation of the securities market;
Establishing rules and standards for conducting securities transactions to ensure efficient operations on the securities market;
Control and supervision over the activities of professional participants of the RCB;
Protecting the interests of securities holders and clients of professional securities market participants who are members of a self-regulatory organization;
Raising the standards of professional activity at the RZB, including standards of professional ethics;
Providing conditions for professional activity at the RCB.
The number of members of a self-regulatory organization must be at least ten. Self-regulatory organizations operate on the basis of licenses. The license specifies the type of professional activity carried out by the members of this self-regulatory organization.
Investment companies (funds)- a kind of financial institutions that accumulate investors' funds by issuing their own securities (obligations) and place them in securities of other issuers.
The activities of an investment company are organizing the issue of securities and issuing guarantees for their placement in favor of third parties, investing in securities, buying and selling securities on its own behalf and at its own expense, including by quotation of securities (announcements for certain "seller price" and "buy price" securities, at which the investment company undertakes to sell and buy them).
Investment companies form their resources only at the expense of own funds(funds of the founders) and the issue of own securities sold to legal entities. Investment companies have no right to form their attracted resources at the expense of the population.
Activity investment fund- This is the issue of shares in order to mobilize investors' funds and their investment on behalf of the fund in securities, as well as in bank accounts and deposits. All risks associated with such investments, all income and losses from changes in the market valuation of such investments are fully attributed to the owners (shareholders) of this fund and are realized by them by changing the current price of the fund's shares. These operations are the exclusive activity of the investment fund.
An investment fund can be formed in the form of a joint stock or unit.
Joint-stock investment funds in Russia were created on the basis of regulatory framework adequate to the period of mass voucher privatization and the state of the stock market at that time. Currently, the following requirements are imposed on joint stock investment funds in accordance with the legislation. Investment fund activities can only be carried out by open joint stock companies. The charter of an investment fund must contain:
The provision that the subject of his activity is investment in securities specified in his investment declaration or in securities and real estate and / or rights to real estate;
Investment declaration, which establishes the main directions, goals and restrictions of the fund's investment activities, the maximum shares of its property that can be invested in securities and real estate;
The procedure for attracting borrowed funds;
A ban on the redemption of their shares;
Prohibition on the issue of other equity securities, except for ordinary registered shares;
Prohibition on the implementation of activities other than investment;
Procedure, place and timing of dividend payment.
The value of the assets of the investment fund must be at least 10,000 times minimum size wages.
By investment strategy, funds are also divided into two groups:
funds seeking to achieve control over joint-stock companies, having their representatives on the board of directors of enterprises that are actively involved in the management of enterprises. Quite often, such foundations are members of financial and industrial groups;
funds that are speculative portfolio investors. Their portfolio is characterized by a high rate of renewal and, accordingly, a larger share of highly liquid securities, some of which are focused on investments in government securities.
The rest of the funds, according to their investment strategy, are a combination of the above two groups.
There are two types of investment funds:
Closed;
Open.
Closed-end investment fund, in which funds are accumulated through the placement at the time of the creation of the fund of ordinary and preferred shares among a certain circle of investors. A closed-end investment fund has a fixed share capital, provides ongoing income to shareholders and is not required to repurchase shares until liquidation.
Open investment fund... Created by issuing ordinary shares. The fund's share capital is not fixed, i.e. additional issue of shares can be carried out, shares of such a fund are freely bought and sold at prices corresponding to the current market value assets (such funds are also called joint, mutual).
A type of open-ended investment fund is a mutual investment fund (UIF), the subject of which is the trust management of the property that makes up the fund.
The UIF model in Russia was developed using the experience of the so-called. contractual investment funds widespread in Austria, Germany, Switzerland. Scheme of their activities:
1) the fund manager enters into a permanent agreement with clients on the management of the attracted financial resources;
2) the contract is accompanied by the issuance of "certificates with cash value" (face-amount certifikation). The certificate indicates the denomination equivalent to the value invested capital, the term of the management contract, the terms of management, the procedure for the redemption of the certificate, the payment of income on it;
3) the agreement between the manager and the depositor is registered with the depository, which controls the use of funds by the manager, the direction of investments, settlements with clients.
The same scheme is used to create business trusts common in the United States (business trusts).
The legal basis for the functioning of such funds in Russia has been formed since 1995.According to Russian legislation, a mutual fund is a set of assets transferred by investors into trust management management company in order to increase this property, the income from the trust management of the property is attributed to the increase in property. Trust management of the assets constituting the fund is carried out by the fund manager (management company).
The unit investment fund is based on the concept of mutual ownership. The investor of the fund can be a legal entity or an individual. By entering a fund, an investor acquires an "investment share" and becomes a co-owner of the fund. Investment share- a registered security certifying the right of its owner to present a demand for redemption to the management company. The issue of investment units is subject to mandatory state registration.
The activities of the fund manager are governed by the following fundamental rights and obligations:
The right to alienate and mortgage the property that makes up the foundation;
Act on his own behalf in the interests of the holders of investment units;
Obligation to buy out investment units of the fund at the request of their owners.
In accordance with Russian legislation, mutual funds can be created in two main forms:
Open;
Interval.
The manager of an open-ended mutual fund has the right to invest funds in the following assets:
Cash, including in bank accounts and in deposits;
Government securities of the Russian Federation;
Securities of the constituent entities of the Russian Federation;
Securities Russian authorities local government (municipal securities);
Foreign securities;
Foreign securities commercial organizations(stocks and bonds);
Securities of Russian open joint-stock companies (shares and bonds).
The manager of such a fund is obliged to redeem investment units within 15 working days from the moment the investor submits a redemption request.
The manager of the interval unit investment fund has the right to invest funds(in addition to the above assets) in real estate and securities of Russian closed joint-stock companies that do not have recognized quotations.
The management company of such a fund determines the frequency (intervals) of redemption of investment shares of investors (at least once a year).
In order to ensure the liquidity of the assets of unit investment funds, restrictions on their structure are envisaged. These restrictions include:
1. Limiting the specific weight of the value of securities of one issuer in the total value of assets or the specific weight of the total assets of the fund allocated in one type of assets;
2. Limitation of the share of securities of one issuer in the issued share capital of this issuer;
3. Restricting the presence of quoted and unquoted securities in the fund's portfolio;
4. Restrictions on the presence of a certain type of assets in the portfolio.
The main difference between a mutual fund and a joint stock fund consists in the fact that the increase in the fund's property (obtained as a result of trust management) is not distributed among the share holders in the form of dividends, but is used to increase the value of the share. Thus, when the units are sold, the mutual fund investors receive a profit equal to the difference between the selling and buying prices of the unit, the current price of the unit is determined by the manager based on the cost estimate net assets fund.
The net asset value of an open-ended mutual fund is determined by the management company every day at the end of the working day. The net asset value of the interval unit investment fund is determined by the management company on the day preceding the day of the beginning of the next deadline for accepting applications for the purchase and redemption of fund units.
The assets of unit investment funds, taken into account in determining the value of net assets, include:
Financial investments (securities);
Deposits;
Cash;
Settlements with debtors.
Liabilities taken into account in determining the value of the fund's net assets include:
Settlements with creditors;
Reserves for future expenses and payments (amounts reserved as remuneration of the manager, specialized depository, registrar, independent appraiser and auditor, other expenses related to trust management).
In general, an investment firm is a corporation, trust or partnership organized under government law that invests the combined capital of shareholders in accordance with the objectives of the shareholders. A fairly unambiguous classification of the belonging of foreign investment funds to one or another type of investment companies is difficult. Nevertheless, if we exclude some of the intermediaries - "deposit" companies, guided by organizational and legal characteristics, the following main types of investment companies can be distinguished: mutual funds ( Mutual Funds) (or "open" - Open-end ), closed mutual funds ( Closed-end Funds), consolidated investment trust ( Unit Investment Trust - UIT ), index mutual funds ( Index Exchange-Traded Funds - ETFs ). Investment companies not falling into the category PC, constitute a group called investment management companies ( managed investment companies).
In turn, each of these types of investment companies includes several subgroups, formed by a combination mainly according to such classification criteria as types of assets:
- stocks, bonds and income securities, taxable money market instruments, tax-free money market instruments;
- investment goals ( investment policy) funds;
- precious metals, foreign investment, global stocks, stock returns, flexible portfolio, balanced portfolio, mixed income, bond income, valuable government papers, global bonds, corporate bonds, high yield bonds, long-term municipal bonds, taxable money market instruments, tax-free money market instruments, etc.
There is a significant variety of forms and types of investment companies, formed based on global practice and the needs of investors.
Mutual Fund ( Mutual Funds) - an investment company that purchases a portfolio of securities selected by a professional investment advisor ( investment adviser), in accordance with the financial goal of the fund (shareholders-investors). Investors buy shares of the fund, which represent proportional ownership of the securities of the entire fund. There is no limit to the number of shares issued by a mutual fund.
By the type of assets, there are three main types of mutual funds - joint-stock ( Mutua lFunds -stock (they are also called equity )), bond ( Bond Fund) and money market funds ( Money Market Funds).
Bond funds ( Bond Funds) invest in fixed income securities. Some of them specialize only in certain types of securities, such as corporate or government bonds.
Money market funds ( Money Market Funds) invest in a pool of short-term, interest-bearing ( interest-bearing ) chain papers. Money market funds invest in short-term securities such as short-term municipal securities, fixed income treasury bills, short-term commercial bills and bank certificates of deposit.
The International Equity and Bond Fund provides retail investors with a convenient, low-cost way to invest in foreign securities markets compared to investing directly in those markets. International investments offer a variety of investments and the possibility of obtaining higher returns.
Closed-end investment company (Closed-end Investment) or a type of closed-end funds ( Closed-end Funds), unlike public investment companies and funds, do not redeem their shares at the request of their owner. Instead, closed-end fund shares are traded on stock exchanges or over-the-counter market... Therefore, an investor wishing to buy or sell shares of a closed-end fund must submit an application to his broker in the same way as he would do in the case of buying or selling shares, for example Microsoft.
Most closed-end funds are not limited in terms of their existence. Dividends and interest received by a closed-end fund on the securities of its portfolio, as well as net capital gains, are distributed to shareholders. However, many funds allow (and encourage) the reinvestment of such payments. In this case, the fund does not distribute funds to investors, but transfers additional shares to them at a price lower than the net asset value or the market value of the share at that time. Since a closed-end fund is a corporation, it can issue shares not only in connection with reinvestment of payments, but also through a public offering. However, this does not happen often, and for the most part, the capitalization of the fund is "closed".
There are two main types of closed-end funds - stocks and bonds.
Closed-end equity funds have the risk that the value of the portfolio securities issued by the fund will decrease, which will lead to a decrease in the value of net assets ( NAV ), as well as to a decrease in the market value of the fund.
Closed-end bond funds are subject to some degree of market and credit risk. Market risk is manifested in the fact that interest rates will rise, lowering the value of the bonds that make up the fund's portfolio. Generally speaking, the longer the maturity of securities in a fund's portfolio, the greater the variability (volatility) of its NAV and market risk.
Joint investment trust (Unit Investment Trust - UIT ) Is an investment company that, throughout its entire existence, owns a portfolio of securities of a specified size and structure.
With the aim of creating PC the founder (often a brokerage firm) - a person who contributes capital to create a company - buys a certain package of securities (stocks, bonds, etc.) and transfers them to a trusted person (for example, a bank). The company then issues its shares, known as redeemable certificates, which are distributed to investors. These certificates provide their owners with the ownership of the securities held by the trustee (in proportion to their participation interest). All proceeds received from the securities by the trustee, as well as the par value, are then paid to the certificate holders. Installed at creation UIT the set of securities changes (that is, some securities are sold and other securities are bought) only in exceptional cases.
Majority UIT own securities with fixed income and cease to exist when the securities expire (or when they are sold). The life of the trust ranges from six months for combined investment trusts operating in money market instruments and stocks, to 20-30 years for companies working with bonds with maturities of more than one year.
Index mutual funds (Index Mutual Funds) and exchange-traded funds ( Exchange-Traded Funds - ETFs ) are similar in that each of them contains investment portfolios that are linked to some index reflecting the dynamics of a particular sector or the market as a whole, or to a specific portfolio of shares and aim to provide an investment return comparable to the value of a specific market index. Investors, both retail and institutional, are considering ETFs and index mutual funds as investment options that make up their portfolios.
Despite the similarity ETFs and index mutual funds, there are key differences between the two types of investment products.
ETF created by the sponsor who chooses the target index ETF, determines which securities will be included in the "basket" of securities and decides how many shares ETF will be offered to investors. Stock ETF are issued when an institutional investor with ETF or by a trust (affiliated institutional investors) contributes to the depository their large holdings of securities, identical or nearly identical in composition to the securities in the target index ETF. Instead of this basket of securities ETF issues an equivalent number of shares for an institutional investor ETF: blocks of shares - "basic units" (creationunit), for example 50 thousand shares ETF, which he as a legal owner (creationunitholder) can, depending on the current situation: keep; exchange back for their shares at net asset value; sell on the exchange. Stock ETF listed on a number stock exchanges where investors can buy them in a similar way to the shares of a publicly traded company. Unlike institutional investors, a private investor can operate with ETF only on the exchange.
There are four main types ETF.
- 1. Stock Index Funds reflect the local stock price index, such as the S & P500 or Tel Aviv 25 Index, international indices stock prices, such as, for example, "index Nikkei 225 ". There are also index funds that reflect structural indexes of stock prices, such as the "biotech index NASDAQ ". Index funds reflecting international indices are traded on the stock exchange in the currency of the country that established the index (ie the price of an index fund reflecting the Eurostok 50 index depends on changes in this index, as well as on changes in the euro against the local currency).
- 2. Foreign exchange index funds (capital notes) reflect exchange rates and contain weekly interest, which is calculated daily and paid quarterly. For example, the price of an index fund consists of two parameters: the first is the current dollar rate used in trading between banks, and the second is an interest based on the interest rate. LIBOR in dollars minus the margin.
- 3. Commodity funds reflect the prices of commodities such as oil, silver, gold, corn, etc.
- 4. "Short" funds reflect in inverse relationship the indices of securities prices, exchange rates or foam of goods, i.e. A short fund allows the investor to generate income while stock indexes, exchange rates, or commodity prices fall. To the price of the "cake" fund is added interest rate periodically paid to investors. The percentage of a cake fund depends on how the cake fund is created: a cake sale of shares by borrowing shares, or a sale of contracts that creates a collateral containing the interest rate.
From point of view Russian legislation, an investment company is a credit and financial institution that accumulates funds of private investors by issuing their own securities (liabilities) and places them in stocks and bonds of enterprises in their own country and abroad. Unlike holding companies, investment companies do not exercise control over the activities of corporations. Depending on the method of forming liabilities, investment companies are divided into two main groups:
- closed, which have a fixed share capital and whose shares are quoted on the market and are not subject to redemption until the company is liquidated;
- open type, which have a constantly changing capital, since their shares are freely traded and bought by the companies themselves at prices corresponding to the current market value of the assets of the investment company. Investment companies act as investors in the financial market. Like investment banks, they occupy an intermediate position between the borrower and the individual investor, but differ in that, unlike banks, they can engage in other types of intermediary activities.
Just like investment banks, investment companies facilitate investments, both direct and portfolio (through financial market instruments: stocks, bonds, etc.).
Direct investments - investing money in material production and sales in order to participate in the management of the enterprise in which the money is invested and to receive income from participation in its activities (direct investments ensure the possession of a controlling stake).
In accordance with the accepted international classification foreign investment direct investments include investments, as a result of which the investor receives a share in the authorized capital of the enterprise of at least 10%. Acquisition of a share in the capital of an enterprise not less than this value makes it possible to directly participate in the management of the enterprise, in particular to have a representative on the board of directors. Direct investment allows you to directly influence the invested business.
Portfolio investments - is an investment in securities, formed in the form of a portfolio of securities. Portfolio investments represent passive ownership of securities, for example, company shares, bonds, etc., and does not provide for the investor's participation in the operational management of the company that issued the securities.
Unlike direct investments, which aim not only to invest in the development of an organization, but also to gain control over its activities, portfolio investments are passive ownership of securities of various companies, which form the investor's portfolio.
Only in the process of forming a portfolio of securities is a new investment quality with specified characteristics achieved. So, a portfolio of securities is the instrument that provides the necessary constancy of income for the investor under conditions of minimal risk.
The main motive for international portfolio investment is the investor's desire to invest in that country and in such securities in which he will bring the maximum profit at acceptable levels of risk. Portfolio investment can also be viewed as a means of protecting money from inflation and generating speculative income.
9.3. Investment activities insurance companies, pension funds and other non-bank credit institutions
In the world practice, insurance companies on the securities market are a financially powerful economic entity, therefore, a serious institutional "player". Their main activity is, of course, insurance. However, in the process of carrying out the main type of activity, they attract long-term funds and form financial reserves, which they place on the securities market, acting as a major participant in the financial market, on the one hand, an investor and issuer, on the other hand.
Insurance companies as buyers of securities (investors) are extremely cautious. Acting in essence of its main activity as a buyer of someone else's risk, an insurance company cannot increase it by acquiring it a second time in the form of buying a risky asset, and therefore in Germany, for example, investments in high-risk securities are generally prohibited; in the United States, no more than 1% of assets can be placed in them. In the UK, investments in various types of non-government securities are limited to 1-5%. It should be noted that such Russian norms are generally much softer, and moreover, we have almost no detailing by type of securities.
Your investment portfolio Insurance companies they are formed, as a rule, from government securities, which ensure the reliability of investments and liquidity, and from stocks, first-tier bonds (blue chips), which in terms of investment strategy resembles commercial banks.
Insurance companies, as representatives of a capital-intensive industry, enter the securities market and, on the opposite side, as large recipients of equity and debt capital raised. This means that they become the issuers of their own securities (stocks and bonds). Insurers operate within general requirements, and their issuing activity is not much different from other companies. By scale emission activities and in terms of securities circulation in the secondary market, the insurance industry is not a leader, significantly inferior to banks and financial and industrial corporations. However, the role of individual large insurance public joint stock companies is assessed as very serious. For Russia, this direction is generally not relevant, but, for example, in the USA or Germany open sale shares of insurance companies for everyone - quite a normal practice.
Reference: a shining example of an international insurance company
scale in the securities market can serve American
International Group, Inc. (A / G) is the largest American insurance company. The headquarters is in New York. Founded in 1919 by Cornelius Vander Starr in Shanghai (China). Subsequently, the company's operations spread throughout the world. In 1969 the company went public. Currently, the head of the company is Edward Liddy. The company ranks 2nd in the world for real estate and accident insurance and 1st in the United States for life insurance. In addition to insurance and reinsurance, AY's activities include financial services, retirement savings and asset management. The company also operates in consumer finance (American General Finance). The company has over 92,000 employees and about 50 million customers in 130 countries. Revenue for 2005 - 98.6 billion dollars.Net profit for January - September 2005 - 10.023 billion dollars.Capitalization - 172.3 billion dollars, equity - 80.61 billion dollars.
The company suffered large losses as a result of the bankruptcy of the largest investment bank USA Lehman Brothers. As a result, the US government decided to provide the insurance giant with a loan of $ 85 billion (and in general - about $ 182.5 billion), in exchange for which 79.9% of the shares of the insurance company will be transferred to the state.
Pension funds in the broadest sense are organizations involved in attracting money from the population in the form of contributions with the aim of their subsequent return in the form of accumulated pension. From the point of view of their importance as a potential investor, it probably makes sense to quote from the textbook “Investments” by Nobel laureate W. Sharpe: “Without a doubt, the most dynamically developing institutional investors today are pension funds and mutual funds. Pension funds are a relatively new phenomenon. The first modern retirement fund in the United States was created by General Motors in 1950. Since then, retirement funds have grown like mushrooms. Currently, about 40% of the working population in the United States participates in some kind of retirement scheme. Pension fund assets, which were only $ 170 billion in 1970, now exceed $ 3 trillion. " ...
To form a source of payment of pensions, pension funds allocate borrowed funds, primarily in the securities market, which allows them to be attributed to its (securities market) participants (investors). Pension funds, due to their specificity, attract, first of all, long-term funds; this gives them the opportunity to invest money by buying securities for long periods. The objects of such investments, as a rule, are stocks and bonds.
In Russian practice, there are, in fact, two systemic participants in the pension services market - the Pension Fund Russian Federation(PFR) and the system of non-state pension funds (NPF). It is worth noting the fact that, despite dynamic development since 2004, non-state pension funds, the number of their participants (persons receiving pensions in them) is only 6.5% of the total number of pensioners in Russia. The activities of non-state pension funds, like the activities of the PFR, are regulated by special legislation. An important place among the legislative acts related to the regulation of the activities of institutions retirement benefits(Pension Fund and NPF) as institutional investors, take acts regulating the structure of assets, in which it is allowed to place pension savings (funds paid by the employer) and pension reserves (voluntarily contributed funds) during their placement, investment. An important aspect of modern practice is the program of state co-financing of funds voluntarily contributed by citizens and / or their employers to increase the size of pensions, which boils down to the following: if a citizen or his employer decides on additional voluntary contributions aimed at increasing pensions, then the state from funds Of the Fund national welfare makes an additional 2,000 to 12,000 rubles. annually, as if taking part in investment process together with a future pensioner. This situation naturally affects the growth of capitalization of both pension savings and pension reserves and, as a result, leads to an increase in the capitalization of the domestic securities market as a whole. Neither the Pension Fund, nor the NPF (with rare exceptions) do not place or invest funds on their own. In such cases, as a rule, a management company is hired. The management company is hired based on the results of an open tender. The PFR, in fact, like the NPF, diversifies risks by hiring not one, but several (in some cases more than a dozen) management companies, each of which receives part of the funds and manages them for a year before the announcement of a new tender.
Pension funds, being able to invest money for a long time, as a rule, practice conservative (can be interpreted as “cautious” in relation to risk) investment strategies, forming portfolios mainly from government and the first category of corporate bonds.
Investment companies in international practice- these are companies that form their funds by issuing shares. Typically, these companies rarely issue bonds. However, they also quite often place money in the shares of other companies. As a profit, they receive the difference between the amount they paid for raising funds and the amount they received in the form of dividends. The scope of activity of investment companies on the market is very extensive. In addition to investing in securities, they are engaged in the formation of subsidiaries, financing investment projects, assist in organizing the placement of securities, issue guarantees for the placement of securities, carry out dealer activities. It all brings additional income, which is received in the form of dividends by the shareholders of these companies. Currently, investment companies exist in two forms: open and closed types. Public investment companies, which are called "mutual funds", issue their shares gradually, in certain tranches, mainly to new buyers, thus gradually building equity capital and expanding their activities. These shares can be traded and resold in the market. Closed-end investment companies issue shares at once in a certain amount. The new buyer can only purchase them on the market from the previous owner at the market price. Such companies operate most successfully in the USA and Canada. Japan, England, in recent years, their activities began to expand in Germany. Such companies have not yet become widespread in Russia.
Fund management companies are organizations that manage the assets of investment, non-state pension or mutual funds. Investment and pension funds have the right to be managed by investment companies that have received the appropriate licenses, which entitle them to trust management of the funds' assets. Management of a mutual fund is an exceptional type of professional activity in the securities market, which can only be combined with the management of other funds.
Investment funds are organizations created in the form joint stock company open type, the main activity of which is investment. Investment funds in their activities rely on collective forms of investment. They attract funds from small and medium investors and form corresponding portfolios of securities on the securities market that generate income. It should be noted that collective forms of investment have a number of advantages: Firstly, an investment fund can place funds not in one or two securities, but in a sufficiently large number of them, thereby forming a portfolio of securities (a set of securities acquired by the investor), and at the same time providing a greater income, since they will be included with different profitability. The small investor cannot always afford the same. Secondly, diversification (distribution) of investments in securities is ensured, which leads to a decrease in risk, since even if several securities from the investment portfolio do not bring income, then these losses will be covered by income from other securities. Thirdly, an investment fund saves on costs due to an increase in the scale of operations, which is due to the fact that the costs of tracking information for managing a small portfolio and conducting operations (primarily payment of commissions) per unit of investment are significantly higher than that of a professional an investor with a large investment portfolio. Fourth, the professionalism of investment funds leads to an improvement in the quality of the portfolio and, accordingly, not only reduces the risk of investments, but also increases its profitability. All this has led to the fact that the role of investment funds in the developed securities markets is becoming more and more significant. In Russia, the first investment funds appeared as voucher investment funds, and their activities were associated with voucherisation, that is, they purchased vouchers, invested money and paid the owners income. However, for many reasons, primarily due to low professionalism, the majority of voucher investment funds ceased to exist, while others, having slightly curtailed their activities in the late 1990s, have now seriously expanded them. Currently, there are a lot of investment funds on the Russian market that work successfully, bringing their clients a fairly stable high income)