Sunday, December 26, 2010

Discretionary Investment

A Discretionary Investment is where the fund manager has discretion to choose where to invest the client's capital, based on any prescribed limits the investment may have. A related term is a discretionary account where the broker/adviser manages the account for the client. Hedge funds and absolute return funds are typically discretionary in nature, to allow the fund manager free reign to make money.

Synonyms: Discretion, Managed account
 
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