Investment fund

“ Even as to accounts large enought to qualify for individual investment management, there might be a potential for a greater profit if the investment were placed in the fund rather than in individually selected securities, because of fixed costs and economies of scale. The mechanics of operating an investment fund might also create promotional pressure. When interests in the fund were redeemed, the bank would be effectively faced with the choice of selling stocks from the fund's portfolio or of selling new participations to cover redemptions. ”

“ The fund will be invested safely, for it will be based upon the security which is the creator and conservator of all property and property rights, industrious and intelligent labor. The accretions to the fund, even at the moderate rate of interest of three per cent per annum, will add, probably, a thousand workers each year to the number of its beneficiaries, while the repayment and re-investment in similar ways of the original fund, will add several thousand more each year. ”

“ The bank might divert talent and resources from its commercial banking operation to the promotion of the fund. Moreover, because the bank would have a stake in a customer's making a particular investment decision-the decision to invest in the bank's investment fund-the customer might doubt the motivation behind the bank's recommendation that he make such an investment. If the fund investment should turn out badly there would be a danger that the bank would lose the good will of those customers who had invested in the fund. ”

“ Capital is the catalyst that turns ideas into new products and services. The Canada investment fund will help provide that patient capital. We will contribute $100 million to the fund over four years and we will seek additional funds in the private sector. ”

“ Manufacturer, you have summarized the discussion upon credit remarkably well, I think.
Mr. Merchant: So do I, and I am sure that we all understand what constitutes the difference between the right and wrong basis of demand obligation—convertibility or non-convertibility—quick assets or slow assets—the commercial fund and the investment fund. If we keep this thought steadily in view it will help us amazingly when [Pg 193] we come to draw a banking bill demanding the recognition of this fundamental distinction. ”

“ The Funds shall be used to invest on a strategic and commercial basis in a manner designed to promote fiscal stability for economic development, and strengthen the top-performing GFIs through additional investment platforms that will help attain the National Government's priority plans. ”

“ Finally it is the long-term investor, he who most promotes the public interest, who will in practice come in for most criticism, wherever investment funds are managed by committees or boards or banks. ”

“ In other cases, which were probably more numerous, railway-managers attempted to give their stock an investment value through stability of income return. In good years when the company earned 10 or 15 per cent on its stock, their policy was to pay only 5 or 6 per cent in dividends, and hold the rest in their surplus fund in order to have the means of paying the same dividends the next year if only 2 or 3 per cent should be earned. By giving their stock stability of income return they hoped and expected to give it some stability of market price, and thus make it attractive to genuine investors. ”

“ The funds may be left for accretion in a savings bank; they may be used to purchase high-grade securities; or with them the very bonds which they are to redeem may be bought and canceled immediately, or allowed to run, the interest accretions going into the fund also. Securities for investment may be bought at a premium or a discount. Expenses will be incurred by way of commission or salary for the trustee, expenses of the trust, advertising, brokers’ commission, etc.; and income will be received by the trustee from the securities held and even from the unexpended balance of cash. ”

“ That seems a mistaken view; the fact that the investment is beyond the company’s control none the less renders its income and expense a fact of current profit and loss, and it should be so shown. Accordingly, the sinking fund expense and income accounts above should be closed into profit and loss, after which their net result will be transferred from surplus to Sinking Fund Reserve, to show the net increment or decrement as a result of the trustee’s operations. ”

“ We will establish a state financing guaranty fund, support leading innovative enterprises in going public, and extend nationwide the pilot preferential tax policies for venture capital investment and angel investment. ”

“ Besides these personal incomes, each industry which paid these dividends and profits, through its depreciation, amortization, replacement, new construction, and surplus funds was reinvesting in the industries billions of wealth that would be used in the creation of more wealth. The normal processes of the growth of the modern economic system has forced upon the masters of life the problem of disposing of an ever increasing amount of surplus.
During prosperous periods, the investment funds of a community like England and the United States grow very rapidly. ”

“ The industrial sector, although accorded high priority by the government, is under financial constraints. New investment funds are generally allocated only to projects that result in import substitution or foreign exchange earnings. ”

“ The share of investors' own resources, including funds of local governments, increased from 36 percent in 1965 to 52 percent in 1971. Budgetary investment funds are being increasingly concentrated on projects in the fields of services and raw materials production.
A satisfactory explanation of the shifts in the pattern of investment financing is not feasible in the absence of adequate information on the changing methods of financing economic enterprises and organizations. The announced government policy is to shift financing progressively from the budget to the economic trusts. ”

“ While these controls apply in many cases to fixed-dollar obligations, like face-amount certificates and the bonds of closed-end investment companies, they are of particular relevance to situations where the investor is committing his funds to the hands of others on an equity basis, with the view that the funds will be invested in securities and his fortunes will depend on the success of the investment. ”

“ The Investment Bank must participate in the preparation of draft plans for the financing of all investment projects undertaken by central and local state organizations from the ministerial down to the enterprise level. ”

“ If any investor, after careful comparison of the characteristics of municipal bonds, either active or inactive, with his necessities, decides that he can more closely satisfy his requirements with municipals than with any other form of security, he should not hesitate to purchase them. It is the opinion of the writer, however, that a thorough survey of the field of investment will generally disclose to the investor some security in either the railroad or corporation field which will suit his requirements as well as the municipal bond and at the same time provide him with a greater income. ”

“ In times of continued business prosperity very high rates are demanded for the use of money, because the liquid capital of the country, to a large extent, has been converted into fixt forms, in the development of new mines, the building of new factories and railroads, and in the improvement and extension of existing properties. These high rates have the effect of reducing the price level of investment securities because people having such securities are apt to sell them in order to lend the money so released, thus maintaining the parity between the yields upon free and invested capital. ”

“ Such business cannot be included in the commercial affairs of the country, economically speaking, because they are essentially trust transactions, and the funds, generally, belong to the investment class. ”

“ Now with this theory in view, our company gets to work and canvasses the country and it gathers together thousands of little, useless, insignificant, unproductive funds like yours and mine and joins them together into one vast, giant aggregate which we call a trust fund. ”

“ In 1930 it created, by an appropriate instrument, a fund to afford those for whom it acted the advantage of investing small amounts in securities at minimum expense and with opportunity of ready liquidation. ”

“ Special attention will be paid to the requirements of a business surplus and of the private investor. In the field of private [22] investment two distinct classes can be recognized—those who are dependent upon income from investments and those who are not. Both classes will be considered. For the investment of a business surplus, safety, convertibility, and stability of price are the qualities to be emphasized; for investors dependent upon income, safety and a high return; and for those not dependent upon income, a high return and prospect of appreciation in value. ”

“ Their holdings of investment securities are kept well within the limits set by their aggregate capital, surplus, and savings funds, and their method of handling commercial business, based as it is on accurate knowledge of their customer's operations and upon the lien upon produce heretofore described, prevents their acceptance, through ignorance, of investment securities under commercial disguise. ”

“ If working capital is to be created by the issue of capital liabilities, it is much better that it should be done by stocks than by bonds. The ideal method, however, is to provide only such an amount of working capital at the organization of a company as is necessary for the conduct of its business, and then, as the volume of its business grows, to accumulate the additional amount necessary out of earnings, refraining from the payment of dividends until the fund is complete. ”

“ In carrying out its task, the European Investment Bank shall facilitate the financing of investment programmes in conjunction with assistance from the Structural Funds and other Union financial instruments. ”

“ For the private sector, instead of a sweeping capital gains windfall to the wealthy and those who speculate, we will create an investment tax credit and a capital gains reduction for patient investors in emerging technologies and new businesses. ”

“ It is coming to be a recognized principle that every business enterprise of [9] whatever kind or size should establish a reserve fund. It is felt that the possession of a reserve fund puts the business upon a secure foundation, adds to its financial strength and reputation, and greatly increases its credit and borrowing capacity. ”

“ As each office, also, has business special to itself, with its own peculiarities, its own interests, and its own mode of investment, any detailed statement might be dangerous, and form the groundwork for rivals to copy or to criticise. The points of chief note are the capital, the amount of liabilities, and the annual returns; and if the endeavour were made to show the funds in proportion to the risks, instead of endeavouring to procure a large show of business at any price, the object of ambition would be the accumulation of capital. ”

“ They shall convert my said residue of property into money, which they shall then invest in safe securities; the capital thus secured shall constitute a fund, the interest accruing from which shall be annually awarded in prizes to those persons who shall have contributed most materially to benefit mankind during the year immediately preceding. ”

“ INVESTMENT OF FUNDS.—Pending disbursement pursuant to a program, plan, or project, the Corporation may invest funds collected through assessments, and any other funds received by the Corporation, only in obligations of the United States or any agency thereof, in general obligations of any State or any political subdivision thereof, in any interest-bearing account or certificate of deposit of a bank that is a member of the Federal Reserve System, or in obligations fully guaranteed as to principal and interest by the United States. ”

“ It will require large outlays of money which should be raised through normal investment channels. But while private capital should finance this expansion program, the Government should recognize its responsibility for sharing part of any special or abnormal risk of loss attached to such financing. ”

“ A proportion of ten to one between capital and aggregate demand obligations would probably be justified by American experience. The present practice of fixing the surplus fund at twenty per cent of the capital would be justifiable if the capital fund were properly regulated in amount. ”

“ Exchequer bills, mortgages on large landed estates, allotments of new loans, were all favourable modes of investment. Even since [268] money has been plentiful, the large capital of the old offices has enabled them to gain a higher interest, because money lent in large sums for a lengthened period will always command a higher rate of interest than small sums for a short period. Thus one old office announces, in its balance-sheet, that it is receiving 4 1/2 per cent. on its investments; and probably other offices, with similar funds, are similarly fortunate. ”

“ The traditional state insurance department regulation of contract terms, reserves, solvency, and permissible investments simply does not touch the points of definition of investment policy and investment technique, and control over investment policy changes and over the interests of the men who shape the policies of investment and furnish investment advice that the 1940 Federal Act provides. ”