Formation of investment portfolio of open collective investment institutions: theory and practice

Ivanov Illia
PhD student at Department of Financial Management and the Stock Market, Odessa National University of Economics, Odesa, E-mail:laeda.29@gmail.com, ORCID ID: https://orcid.org/0000-0003-3998-8098

Cite this article:

Ivanov I. (2022) Formation of investment portfolio of open collective investment institutions: theory and practice. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Formuvannia investytsiinoho portfelia vidkrytykh instytutiv spilnoho investuvannia: teoriia ta praktyka; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 3-4 (292-293), pp. 53-60.

Abstract

The purpose of this article is researching the peculiarities of the collective investment institutions (CII) investment portfolio formation process and analysis of the open collective investment institutions investment portfolio performance in practice. Defined domestic analogue of the concept “portfolio performance”, which allows to align domestic researches with international ones. Defined new concept: “competing portfolio”, which means a portfolio, whose performance can compete with the asset class index, considers the investor's goals and additional investment requirements, and which is robust enough to minimize panic and unjustified manipulation with portfolio in a period of high uncertainty in financial markets; outlined the concept “investment portfolio of collective investment institution” due to existing specifics of CII functioning. It is determined that the process of formation of the CII investment portfolio requires additional research aimed at specifying the stages in accordance with the peculiarities of the CII depending on the type and type. Legislative restrictions on the structure of open diversified CII assets are systematized. The dynamics and structure of open CII assets are analyzed, and proved that, according to poor performance comparing to other investment opportunities, the structure of CII need further optimization. Additional research on ways of optimization of CII portfolios considering the updated legalization is needed to help the investment fund managers to maximize the efficiency of investment portfolio formation, as well as optimize the structure of investment fund assets which can significantly expand investment tools, and thus provide more opportunities for effective investment portfolio to meet needs of private investors.

Keywords

collective investment institution, investment portfolio, investment fund, portfolio performance, competing portfolio.

JEL classification:G110, G230; DOI:10.32680/2409-9260-2022-3-4-292-293-53-60

UD classification:336.714

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