These funds invest in a wide range of Canadian companies through common and preferred shares. The primary objective of Canadian equity funds is to provide capital gains for investors through increases in stock prices. A stock is a share in a corporation's assets such as buildings, land, machinery, and furniture, and a share in its profits if it does well.
Corporations issue two types of stocks.
Common stocks give stockholders voting rights and may also pay dividends. Holders of preferred stock, on the other hand, generally have no voting rights but must receive dividend payments before common stockholders. In exchange for this money, the management of the company gives up some of its control to the people who buy the shares. After the IPO, the shares are bought and sold on the stock market and the company makes no further money on these trades. Foreign exchanges are located in major cities such as New York, London, Paris, Tokyo, and Hong Kong.