The correct answer is D. Reduced expenses.
Investment companies are companies that pool money from investors and invest it in a variety of assets, such as stocks, bonds, and real estate. This allows investors to gain exposure to a wider range of assets than they could if they were investing on their own. Investment companies also offer diversification, which can help to reduce risk. Managed portfolios are portfolios that are managed by professional investment managers. This can be beneficial for investors who do not have the time or expertise to manage their own portfolios.
Reduced expenses is not a characteristic of investment companies. In fact, investment companies typically have higher expenses than if you were to invest in the same assets on your own. This is because investment companies have to pay fees to their managers, as well as fees to brokers and other intermediaries.
Here is a brief explanation of each option:
- Pooled investing: This is the process of combining money from multiple investors to invest in a single asset or group of assets. This allows investors to gain exposure to a wider range of assets than they could if they were investing on their own.
- Diversification: This is the process of spreading your money across different types of assets in order to reduce risk. By investing in a variety of assets, you can minimize your losses if one asset type performs poorly.
- Managed portfolios: These are portfolios that are managed by professional investment managers. This can be beneficial for investors who do not have the time or expertise to manage their own portfolios.
- Reduced expenses: This is not a characteristic of investment companies. In fact, investment companies typically have higher expenses than if you were to invest in the same assets on your own. This is because investment companies have to pay fees to their managers, as well as fees to brokers and other intermediaries.