What are Actively Managed Certificates (AMCs)

Have you ever considered an investment that combines the diversification of a mutual fund with the flexibility of a structured product? That's the magic of Actively Managed Certificates (AMCs)! Imagine a basket of investment opportunities – stocks, bonds, even alternative assets – and AMC is your key to unlocking its potential.

But what exactly is an AMC?

Think of it as a professionally curated investment package. Instead of buying each asset individually, you invest in the "wrapper," gaining exposure to everything inside. The beauty lies in the "active" part. Unlike static investment options, AMCs boast a dedicated manager who constantly shuffles the contents, aiming to maximize returns for you.

Similarities and Differences: ETFs, Unit Trusts, and AMCs

While AMCs share some traits with their popular cousins, ETFs and Unit Trusts, there are key distinctions to remember:

The Common Ground:

• All three pool funds from multiple investors, diversifying risk through a basket of underlying assets.
• Seasoned professionals manage all three, making informed decisions about buying and selling.

Where They Diverge:

• ETFs and Unit Trusts are like communal investment pools, where you own shares. AMCs, however, are more like debt instruments issued by institutions, their price determined by supply and demand, not the underlying assets' value.
• AMC managers enjoy greater flexibility in adjusting their holdings within a predefined universe, compared to the more rigid structure of many ETFs and Unit Trusts.

Unlike ETFs and Unit Trusts with their strict investment rules, Actively Managed Certificates (AMCs) offer managers more freedom to choose what to invest in. This flexibility comes at a cost: AMCs are less liquid, have wider bid-ask spreads due to a less developed market, and can be less transparent. Think of them as a trade-off: more control for the manager, but less accessibility and clarity for you.

The Advantages of AMCs:

• Flexibility: Dive into a wider array of investment options than traditional funds.
• Cost-Effectiveness: Lower fees and minimums compared to hedge funds.
• Liquidity: Effortlessly buy and sell your AMCs on the exchange.

But Remember, Every Rose Has Its Thorn:

• Performance Risk: Like any actively managed investment, outperformance is not guaranteed. Skill and strategy are crucial.
• Complexity: AMCs can have intricate structures and fees, demanding thorough research before investing.
• Counterparty Risk: The issuer's ability to fulfill obligations adds another layer of risk.
• Limited Voting Rights: Unlike traditional funds, voting rights on underlying assets are typically absent in AMCs.

The Verdict: Are AMCs Right for You?

AMCs offer a compelling option for investors seeking professional management, diversification, and potentially lower costs. However, carefully weigh the risks and ensure they align with your investment goals and risk tolerance.

Ready to explore the world of AMCs?

EasyEquities offers a selection of AMCs like the  High Street Offshore Yielding Portfolio ETN and the High Street Wealth Warriors AMC, waiting to be part of your investment journey. Visit our platform today and unlock a world of possibilities!