Investment Companies Flashcards
Investment Companies
Clearly defined investment objectives
Have a prospectus
What is an UIT
Unmanaged investment company that DOES NOT have
BOD
Actively managed
Investment Advisor
UITs have
Trust indenture
Shares MUST be redeemed by trust
What is an open-ended investment company
Can continually issue new shares
Deliver prospectus (prior or concurrent)
Priced at NAV
Reedemable
What is a close-ended Investment Comopany
Actively managed Trades less than NAV Has a fixed # of shares after IPO Non-redeemable Must close position in the 2ndary market Registered under Investment act of 1940
What are ETFs
Passive investment company
tracks index
performance matches market
What is a class A share
Front-end load sales charge
Charge added to NAV to give POP
Breakpoints are for who
Married/parents & minors/corporations
NOT for : investment clubs or associions
What is a leveraged ETF?
Attempting to get 2-3x more than the underlying index
Can buy on margin
If index goes up 2% - leveraged EFT increases 4% (DAILY)
What is a reverse EFT (short EFT)
Wanting the index to decrease
If the index decreases, the EFT will increase
Open -Ended Mgmt Compant (Mutual Fund)
Has BOD (40% non-employed), provides unbiased opinion
Investment Advisor (Firm), manages portfolio, buy and sell
Gets paid on % of AUM
Custodian (safe keeping) - assets held at custodial bank
Transfer agent - issue, sell and redeem shares, provide customer service, # outstanding
What is a hedge fund
Private investment company
Open enrollemnt 1x per year, unregistered
High net worth clients, accredited investors
RISK: liquidity
