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Investors Type and Expectations

This document outlines the typical investment needs of different types of clients including individuals, pension plans, endowments, banks, insurance companies, investment companies, and sovereign funds. It discusses their common time horizons, risk tolerances, income needs, and liquidity needs. For example, it states that defined benefit pension plans typically have a long time horizon, quite a high risk tolerance, high income needs for mature funds but low for growing funds, and quite low liquidity needs.

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chawlavishnu
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58 views3 pages

Investors Type and Expectations

This document outlines the typical investment needs of different types of clients including individuals, pension plans, endowments, banks, insurance companies, investment companies, and sovereign funds. It discusses their common time horizons, risk tolerances, income needs, and liquidity needs. For example, it states that defined benefit pension plans typically have a long time horizon, quite a high risk tolerance, high income needs for mature funds but low for growing funds, and quite low liquidity needs.

Uploaded by

chawlavishnu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

INVESTMENT NEEDS BY CLIENT

TYPES

Client

Time
Horizon

Risk
Tolerance

Income
Needs

Liquidity
Needs

Individual
investors

Varies by
individuals

Varies by
individuals

Varies by
individuals

Varies by
individuals

Defined
benefit
pension
plans

Typically
long term

Typically
quite high

High for
mature
funds; low
for growing
funds

Typically
quite low

Endowmen
t and
foundation
s

Very long
term

Typically
high

To meet
Typically
spending
quite low
commitment
s

Banks

Short term

Quite low

To pay
interest on
deposits
and
operational
expenses

High to
meet
repayment
of deposits

INVESTMENT NEEDS BY CLIENT


TYPES
Client

Time
Horizon

Risk
Tolerance

Income
Needs

Liquidity
Needs

Insurance
companies

Short term
for property
and
casualty;
long term
for life
insurance
companies

Typically
quite low

Typically low High to


meet claims

Investmen
t
companies

Varies by
funds

Varies by
funds

Varies by
funds

Sovereign
funds

Very long
term

High

Typically low Low

High to
meet
redemptions

ASUMPTIONS ABOUT
INVESTORS
Rational
Risk averse
Utility maximisers

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