Below are some of the most important features that define a well-functioning investment
industry and, in turn, benefit investors.
An important feature that characterises a well-functioning investment industry is
the availability of a broad range of investment opportunities that meets investors’
needs. Investors can invest in debt and equity securities and they can also invest in
derivatives and alternative investments. These investments are described in more
detail in the Investment Instruments module. Investors may also choose to save
through investment vehicles that exist solely to hold investments on behalf of their
shareholders, partners, or unitholders (units refer to shares and bonds for equity and
debt securities, respectively). The ownership interests of these companies are called
pooled investment vehicles because investors in these vehicles pool their money for
common management. Types and characteristics of investment vehicles are discussed
in the Investment Vehicles chapter.