30 September 2016

Unit Investment Trust/ Closed-Ended Funds

Introduction and Definition

Unit investment trust is an investment company which purchases andholds fixed and redeemable portfolio of stocks, bonds or othersecurities for a specified period of time (Steinberg et al 39). It iscommonly abbreviated as UIT. Closed-ended fund is an investmentcompany which just like UIT, issue fixed portfolio of securities thatare unredeemable (Anderson, Seth and Gustav 56). UIT’s fixed naturemeans that when the public offer for sale of securities is closed, nofurther transactions take place until the termination date is reachedusually 1-2 years for equity trusts and 20 years for bonds. The maintypes of unit trusts are fixed income (bonds) and equity (stocks)trusts. Bonds can be taxable such as corporate bonds or tax-exemptsuch as municipal bonds. Equity trusts are either domestic orinternational trusts including common and preferred stocks,government securities and mortgage stocks.

History

Unit investment trusts and closed ended funds originated in theUnited States during the late 1890s and early 1920s (Anderson, Sethand Gustav 76). The earliest closed ended trust was created in1893called the Boston Personal Property Trust. Out of an investor’sneed to accumulate public ownership in his respective company the1907 Alexander Fund was created and was the stepping stone to moderntrust funds. The other earliest trusts were Massachusetts Investors’Trust (1924) and State Street Investors’ Trust (1924) andWellington Fund (1928). The initial trusts were either fixed orsemi-fixed (Laopodis 32).

The popularity of the trust funds grew exponentially through 1930sand early 1940s where the growth slowed due to World War II and laterrecovered and expanded to the current trust funds. Major regulationswere derived from the Securities Act and Investment Company Act of1933 and 1940 respectively (Laopodis 34).

Developments

Unit investment trusts and closed ended funds brought many changes inthe market which was dominated by Managed Investment Companies whichwere created by investment bankers, charged high fees and had littlediversification (Steinberg et al 39). Some of the major developmentsthat UITs and closed ended funds brought include: unmanaged platformof investment which allowed investors diversified securities andliquidity of their investments at a fair price fixed portfolios withdefinite termination periods reedemability of the invested unitssecondary trading of sold securities by sponsors in small stockexchanges and regulation measures through enactment of The 1933Securities Act and 1940 Investment Company Act (Bottazzi et al 34).

Comparing Unit Investment Trusts and Closed-ended Funds

UITs and closed ended funds have a number of advantages to investors.UITs and closed ended funds provide a platform where people caninvest their money securely and reap high returns on initialprincipal capital (Bottazzi et al 34). Investing in unit investmenttrusts is affordable especially the equity trusts since they aremanaged passively and have no board of directors of corporateofficers hence accruing fewer charges and expenses. UITs and closedended funds offer diversity of products by investing in manysecurities and this allows individual investors to earn interest froma pool of investments (Bottazzi et al 54). These trusts are alsoshort-lived and offer liquidity of the principal invested thus savingthe investors from the market vagaries and uncertainties.

Comparing the Effects of Unit Investment Trusts and Closed-endedFunds on us

Unit investment trusts and closed ended funds have many effects onall of us. IUTs and closed ended funds offer a perfect investmentground for our surplus money with a higher degree of security andassurance of good returns (Bottazzi et al 34). They offercompetition to other trust funds such as closed end funds, mutualfunds and other investment companies opening ground for affordableand diversified investment avenues for potential investors. Learningabout the operations of UITs and closed ended funds provide necessaryinformation and exposure to various stocks traded in the marketfostering good financial and investments decisions (Bottazzi et al37).

Conclusion

Unit investment trusts are investments companies which deal withfixed and redeemable securities and operate for a specified period oftime. Closed-ended fund is an investment company which just like UITissue fixed portfolio of securities that are unredeemable. UITs andclosed ended funds are popular with investors due to their highliquidity, diversification and affordability (Laopodis 54).

Works Cited

Anderson, Seth, and V. R. Gustav. Closed-End Investment Companies:Issues and Answers. Vol. 7. Springer Science &amp BusinessMedia, 2012.

Bottazzi, Laura, Marco Da Rin, and Thomas Hellmann. &quotTheimportance of trust for investment: Evidence from venture capital.&quotReview of Financial Studies (2016): HHW 023

Laopodis, Nikoforos. Understanding investments: theories andstrategies. New York: Routledge, 2012.

Steinberg, Jonathan L., and Luciano Siracusano III. &quotFinancialInstrument Selection and Weighting System and Method.&quot U.S.Patent Application No. 13/412,434.

30 September 2016

Unit Investment Trusts and Closed-ended Funds

Introduction and Definition

Unit investment trust, commonly known as UIT, is an open-endedinvestment company which purchases and holds fixed and redeemableportfolio of units or securities for a specified period of time(Steinberg et al 39). Closed-ended fund is an investment companywhich just like UIT issue fixed portfolio of securities that areunredeemable (Anderson, Seth and Gustav 56). Unit investment trustsare usually fixed such that once the public offer to buy thesecurities is closed no further transactions can be carried out onthem until the termination date. Closed ended fund continue to tradeshares in a recognized stock exchange after closure of public offer(Laopodis 56). The main types of unit trusts are fixed income (bonds)and equity (stocks) trusts. Bonds can be taxable such as corporatebonds or tax-exempt such as municipal bonds. Equity trusts are eitherdomestic or international trusts including common and preferredstocks, government securities and mortgage stocks (Laopodis 60).

History of UITs and Closed Ended Funds

Unit investment trusts and closed-ended funds originated in theUnited States during the late 1890s and early 1920s (Anderson, Sethand Gustav 76). The earliest closed ended trust was created in1893called the Boston Personal Property Trust. Out of an investor’sneed to accumulate public ownership in his respective company the1907 Alexander Fund was created and was the stepping stone to moderntrusts. The other earliest trusts were Massachusetts Investors’Trust (1924) and State Street Investors’ Trust (1924) andWellington Fund (1928). The initial trusts were either fixed orsemi-fixed. The popularity of the trust funds grew exponentially andby 1930s more than 100 million trust stocks had been sold in America.

Some of the factors that led to the popularity of these fixed trustswere the increasing demand for common stocks by the public thepredominance of fixed trust investments the easiness of purchasingthe shares which by then required a minimum of five shares at $8-10per share and the distrust that existed between the public and theinitial managed investment companies (Laopodis 34).

Developments of UITs and Closed Ended Funds

Unit investment trusts and Closed Ended Funds brought many changes inthe market which was dominated by managed investment companies.Managed investment companies were created and managed by investmentbankers or security brokers. They had little diversification ofproducts and usually charged high fees to investors. UITs brought inunmanaged platform of investment which allowed investors diversifiedsecurities and liquidity of their investments at a fair price(Steinberg et al 39). The UITs also transformed the investmentenvironment by offering fixed portfolios with definite terminationperiods.

Fixed portfolios were much secure because the investors had knowledgeof what they were investing in unlike the mutual funds which wereactively traded on the stock exchange (Steinberg et al 40).Reedemability of the invested units was also another change which wascreated in the market due to the ability of UITs to terminateoperations after agreed periods of time usually a few months toyears. Closed Ended Funds do not offer redeemable shares andtherefore, the trust holds them indefinitely.

IUTs also introduced the aspect of secondary trading where thesponsor could trade the sold securities in stock exchanges and earnadditional funds for the trust. Closed Ended Funds however continueto trade its shares primarily in prominent stock exchanges and thepremiums or discount they accrue is based on the net asset value ofthe stocks (Steinberg et al 45). As the complexity of investmenttrusts increased there was need for regulation. The 1933 SecuritiesAct and 1940 Investment Company Act were created to regulate theregistration and management of UITs and Closed Ended Funds whichlacked any board of directors of corporate management officers(Bottazzi et al 34).

Comparing UITs and Closed Ended Funds

Unit trusts, both closed and open-ended are very important investmentcompanies. Many people would want to create their own investmentsportfolios and this would mean gaining regular and consistentinformation about the market changes (Bottazzi et al 34). Today’sfinancial markets and environments are very sophisticated thereby,becoming difficult for a person to keep track of the prevailingchanges. Unit investments trusts and Closed Ended Funds provide aplatform where such people can invest their hard-earned money underthe management of professional fund managers.

Investing in unit investment trusts is affordable especially theequity trusts (Bottazzi et al 54). Different people can buy specifiednumber of stocks according to their financial muscle. The operationalcosts and other expenses are few since the trust is passively managedand lack board of directors or corporate officers. Based on the factthat the trusts purchase highly profitable securities, the investorsare able to reap high dividends and interests annually orsemiannually.

Closed Ended Funds on the other hand, are affordable but there aremore expenses incurred because of management fees and otheroperational charges (Bottazzi et al 44). They however, have morereturns since the trust can trade the shares in stock exchanges at ahigher price earning the investors better returns on capital.

UITs also offer diversity of securities. Usually the trust invests inmany securities and this allows individual investors to earn interestfrom a pool of investments (Bottazzi et al 67). The UIT sponsors alsocreate a secondary market for the securities sold to investorsusually at a higher price. Such a market benefits both the sponsorand the trust via the additional returns on sales. The unit holderbenefits from a trust that is financially strong and stable duringeconomic turmoil.

The trust is also short-lived and offer liquidity of the principalinvested thus allowing investors to pull out their investments at theend of the UIT term or daily sales or buy-outs based on net assetvalue (Bottazzi et al 68). This saves the investors from the marketvagaries and uncertainties. They are also able to reinvest theirfunds in other profitable units.

Comparing the Effects of UITs and Closed Ended Funds on Us

Unit investment trusts and Closed Ended Funds have many effects onall of us. First, the trusts offer a perfect investment ground forour surplus money with a higher degree of security and assurance ofgood returns (Bottazzi et al 34). They are managed by professionalswho are able to make effective predictions on the profitable stocksto offer. They have offered competition to other trust funds such asmutual funds and other investment companies opening ground foraffordability and diversification of investment avenues for potentialinvestors (Bottazzi et al 37). Learning about the operations of UITsand Closed Ended Funds give us the necessary information and exposureto various stocks traded in the market and helps us to make goodfinancial and investments decisions.

Conclusion

In conclusion, unit investment trusts are investments companies whichdeal with fixed and redeemable securities and operate for a specifiedperiod of time. Closed-ended fund is an investment company which justlike UIT issue fixed portfolio of securities that are unredeemable.Unit investment trusts and Closed Ended Funds started in the UnitedStates and spread to other countries in the early 1920s (Laopodis54). The UITs and Closed Ended Funds are popular with investors dueto their liquidity, diversification and affordability.

Works Cited

Anderson, Seth, and V. R. Gustav. Closed-End Investment Companies:Issues and Answers. Vol. 7. Springer Science &amp BusinessMedia, 2012.

Bottazzi, Laura, Marco Da Rin, and Thomas Hellmann. &quotTheimportance of trust for investment: Evidence from venture capital.&quotReview of Financial Studies (2016): HHW 023

Laopodis, Nikoforos. Understanding investments: theories andstrategies. New York: Routledge, 2012.

Steinberg, Jonathan L., and Luciano Siracusano III. &quotFinancialInstrument Selection and Weighting System and Method.&quot U.S.Patent Application No. 13/412,434.

30 September 2016

Google Analytics

Google Analytics uses a tracking code to collect data from theinternet sites. The current Google Analytics, Universal Analytics,uses Measurement Protocol to either request data or to compile andsend the selected information to the Google Analytics servers. Inorder to track specific users, a tracking code must be added to apage either by use of Java Snippet or Google Analytics tag. When auser visits the page, the tracking code loads and a “hit” iscreated which is then transmitted to the servers.

The “hit” takes into account all the relevant information aboutthe user at that specific moment in time such as page informationincluding the URL and page title information on the browser,including name, viewport, resolution, java capabilities and versionof flash player and finally user information such as location basedon the origin of IP address and user language. The IP address is notcaptured by Google Analytics but only its origin due to privacyviolation policy. The “hit” only sends snapshot data at aparticular time and therefore, any surfing changes by the user cannotbe recorded unless the user shifts to another tagged page.

The actual data collection from the website to the current UniversalAnalytics uses a collect-request. It uses the same request tosend collected data Google Analytics servers and return it again towebsites. Initial Analytics like Urchin, Asynchronous and Classicusually used the tracking pixels. The collect isusually a slice of the Measurement Protocol, the platform used byUniversal Analytics. The protocol specifies and stores all the dataor information that need to be collected. All the data interplaybetween the website and the Google Analytics platform can be seen onthe browser’s tag as it is being transmitted. It is possible tocustomize and segment the transmission parameters and adding them tothe protocol so as to receive specific information by using certaincodes.

In the older versions of Google analytics, the data collection andtransfer involved the use of “beacon”, ‘image’ and “xhr”.Browser capabilities and “hit” size determines the best way totransfer this information. If one aspect is not supported by theuser’s browser, the default Analytics platform will decide on theother versions in which the data can be transferred. For instance, ifthe user’s browser does not support ‘beacon’, the defaultAnalytics platform can either allow fall back to “image” or “xhr”depending on the browser or hit size.

The Analytics system has four major attributes, namely collection ofdata, configuration, processing and reporting of data. Datacollection as specified above is through Measurement Protocol forlatest Analytics and tracking pixels for older versions, from variouswebsites and mobile applications. Points of sale systems and otherinternet connected environments can also be tracked. Every time auser visits the tracked website, the analytic system transmits a“hit”, that is, a package of information.

Once the data is collected, it is processed. This involvestransformation of raw data into valuable information. Processed datais then configured through various Google Analytics platforms such asfilters and then kept in the database. This stored data is immune toany subsequent changes. Reporting involves accessing the data fromthe Google Analytics and retrieving it or using personalized codes orcore reporting API. Reports created by Google Analytics can containboth metrics and dimensions. Dimensions usually characterize theusers while metrics numerically and quantitatively measure the user’ssessions and actions.

Google analytics can be used to create measurement plans. Thisinvolves definition of the plan by documenting relevant objectivesand metric indicators. Implementation plans can then be createdthrough snippets and other product features that can be tracked.Actual implementation involves the websites and applicationdevelopers who follow the specified plans to create the trackingthrough server redirects, multiple domains and Analytics snippets andAd-words. Maintenance and refining the measurement plan according toprevailing business environments is important so as to keep abreastwith the reporting needs.

Google Analytics can also be used in micro-conversion andmacro-conversion of transaction records. Micro-conversion is theborderline transaction that indicates that a user is in the processof making a macro-conversion. Macro-conversions especially ine-commerce indicate a complete transaction or channel. Everyconversion is assigned a particular attribution which is the creditvalue of the transaction and usually corresponds to the last activitythat created the earnings. Occasionally, first-click attribution isused and they are assigned to the first activity that generated therevenues.

I would also like to learn more about the generation of traffic inwebsites using the Google Analytics as seen in network marketing.Another critical area of interest is how to shut down all thetracking codes from accessing my IP address location whenever I surfonline. It is irritating sometimes to get redirected often to certaincites without my prior knowledge or even notification. As much asthere are advantages of tracking in business, there arises apertinent limitation to privacy.