Apr 18, 2016

Finance English practice: Unit 36 — Asset Management

25 cards
, 86 answers
  • Complete the sentences below. Use the key words if necessary.
    • Allocating and diversifying assets

      key words
      Asset management      ○      portfolios      ○      Unit trusts      ○      securities      ○      allocate      ○      Asset allocation      ○      diversify


      WHAT?
      is managing financial assets for institutions or individuals.

      WHO?
      Pension funds and insurance companies manage huge amounts of money. Private banks specialize in managing — all the investments held by an individual investor or organization — of wealthy individuals. invest money for small investors in a range of — a general name for shares, bonds and other tradable financial assets.

      HOW?
      Asset managers have to decide how to — to distribute according to a plan — funds they’re responsible for: how much to invest in shares, mutual funds, bonds, cash, foreign currencies, precious metals, or other types of investments.

      WHY?
      decisions depend on objectives and size of the portfolio. The portfolio’s objectives determine the returns expected or needed, and the acceptable level of risk. The best way to reduce exposure to risk is to — to buy a wide variety of different securities — the portfolio — easier and cheaper for a large portfolio than a small one.

      Type of investor

      key words
      regular income      ○      preserve      ○      capital preservation      ○      accumulate      ○      growth      ○      capital accumulation      ○      volatile


      Investors have different goals or objectives.
      • Some want from the investments — less concerned with size of their capital.
      • Some want to (keep) their capital — avoiding risks. If the goal is , the asset manager usually allocates more money to bonds than stocks.
      • Others want to or build up capital — taking more risks. If the goal is or , the portfolio will probably include more shares than bonds. Shares have better profit potential than bonds, but are also more — their value can increase or decrease more in a short period of time.

      Active and passive investment

      key words
      active strategy      ○      passive strategy      ○      index-linked funds      ○      track      ○      fees      ○      outperform the market


      Some asset managers (or their clients) choose an — buying and selling frequently, adapting the portfolio to changing market circumstances. Others use a — buying and holding securities, leaving the position unchanged for a long time.

      Nowadays there are lots of which simply try to or follow the movements of a stock market index. They buy lots different stocks in the index, so if the index goes up or down, the value of the fund will too. They charge much lower than actively managed accounts — and usually do just as well. Investors in these funds believe that you can’t regularly — make more than average returns from the market.

    • British English or American English?
      • unit trusts
        • British English
        • American English

      • mutual funds
        • British English
        • American English

      • index-linked fund
        • American English
        • British English

      • tracker fund
        • American English
        • British English

    • Make the word combinations with the verbs below. Use the nouns from the box.
      • box
        capital      assets      funds      money      portfolios      accounts


        accumulate

        • diversify

          • allocate

            • allocate

              • allocate

                • manage

                  • manage

                    • manage

                    • Complete the sentences.
                      • I don’t want to pay a bank to  . . . 
                        manage my assets
                        ; I can do it myself.
                        • accumulate capital
                        • allocate their funds
                        • diversify my portfolio
                        • manage my assets

                      • I have lots of different types of securities, because I decided to  . . . 
                        diversify my portfolio
                        .
                        • allocate their funds
                        • manage my assets
                        • diversify my portfolio
                        • accumulate capital

                      • As an asset manager, I discuss clients’ needs and objectives and then we decide how to  . . . 
                        allocate their funds
                        .
                        • manage my assets
                        • allocate their funds
                        • accumulate capital
                        • diversify my portfolio

                      • If my clients want to  . . . 
                        accumulate capital
                        , I take more risks, and buy a lot of stocks.
                        • diversify my portfolio
                        • accumulate capital
                        • allocate their funds
                        • manage my assets

                    • Match the statements with the investment goals.
                      • I want to accumulate wealth, but I know that this means taking risks and buying securities with volatile prices that could go down as well as up. —  . . . 
                        growth
                        • capital preservation
                        • growth
                        • income

                      • I want a regular return every year, because I need that money, even if this means I might have to risk losing some of my capital. —  . . . 
                        income
                        • income
                        • capital preservation
                        • growth

                      • I definitely don’t want to risk losing any of my capital, even if this means that some years I get a very low return. —  . . . 
                        capital preservation
                        • growth
                        • income
                        • capital preservation

                    • Match the two parts of the sentences.
                      • 1. The value of index-linked funds will change frequently  . . . 
                        if the whole market is volatile.
                        • manage the investments of rich investors.
                        • diversify the money of small investors.
                        • if the whole market is volatile.
                        • if the client wants to avoid risks.
                        • if the client hopes to accumulate capital.

                      • 2. Private banks  . . . 
                        manage the investments of rich investors.
                        • if the whole market is volatile.
                        • if the client wants to avoid risks.
                        • diversify the money of small investors.
                        • manage the investments of rich investors.
                        • if the client hopes to accumulate capital.

                      • 3. Asset managers buy more bonds than shares  . . . 
                        if the client wants to avoid risks.
                        • manage the investments of rich investors.
                        • if the whole market is volatile.
                        • if the client hopes to accumulate capital.
                        • if the client wants to avoid risks.
                        • diversify the money of small investors.

                      • 4. Mutual funds  . . . 
                        diversify the money of small investors.
                        • diversify the money of small investors.
                        • if the client hopes to accumulate capital.
                        • if the client wants to avoid risks.
                        • if the whole market is volatile.
                        • manage the investments of rich investors.

                      • 5. Asset managers buy more shares than bonds  . . . 
                        if the client hopes to accumulate capital.
                        • if the client wants to avoid risks.
                        • manage the investments of rich investors.
                        • if the client hopes to accumulate capital.
                        • if the whole market is volatile.
                        • diversify the money of small investors.

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