NSSC Blog: Before You Invest

Question of the week: What is a private placement offering?

In the news last week, a Canadian company announced a private placement offering. That led to the question, what is that exactly? A private placement offering is a way for a company (public or private) to raise capital. However, it differs from a regular public offering where securities are made available for sale in the open market to any type of investor, typically through a stock exchange for common shares.

Question of the week: What is active management?

Active management is an investment strategy where an investment manager makes specific investments in an effort to outperform an investment benchmark or market index, such as the TSX or S&P 500. If you hear of an investor or an investment manager trying to “beat the market” they are using active management to try and obtain better than market-average returns.

Question of the week: What is a REIT?

A Real Estate Investment Trust (REIT) is an investment vehicle that invests predominantly in income-producing real estate. This income-producing real estate can include offices and apartments, warehouses, shopping centres, hotels and parking garages. REITs may be publicly traded or private trust relying on a prospectus exemption.

Question of the week: What is a hedge fund?

Hedge funds have been easy fodder for Hollywood over the years, frequently appearing in movies (Wall Street: Money Never Sleeps and The Big Short) and TV shows (Billions) that have some aspects of finance or wealth attached to the plot. The term hedge fund is bantered around a lot, but that doesn’t mean the average investor has any idea what they actually are. If their only introduction to a hedge fund is through the entertainment it’s highly likely they know very little about them at all.

Question of the week: What is an investment fund manager?

We conclude our walk through the categories of registration with a look at investment fund managers. As the name would suggest an investment fund managers manages a fund. It could be a mutual fund, exchange-traded fund (ETF), or some other kind of investment fund.

The manager is responsible for implementing a fund’s investment strategy and managing its portfolio activities. This can include analyzing financial statements, selection of assets, selection of stocks, plan implementation and ongoing monitoring of the fund’s investments.

Question of the week: What is a portfolio manager?

 Our look at the categories of registration resumes this week with a look at portfolio managers. A portfolio manager is a firm or individual member of a firm that manages an investor’s portfolio on their behalf. This includes choosing what investments to buy, sell and hold for the investor. To do so they must be given discretionary authority from the investor.