17 - Managed & Structured Flashcards
What two types of account structures are possible for managed products?
Pooled accounts and separately managed accounts
A structured product is active or passive investment vehicle?
Passive
What types of products are considered “managed products”?
ETFs, hedge funds, mutual funds, segregated funds, private equity funds, closed end funds, and labour-sponsored venture capital corporations.
What are some examples of a structured product’s underlying assets?
Mortgages, car loans, credit cards receivable, equity indexes.
Managed Products have open vs closed structure, maturity date, liquidity, secondary market, performance goal?
Open ended typically no maturity dates liquid¬ excellent to poor secondary mkt goal: returns or risk reduction
Structured Products have open vs closed structure, maturity date, liquidity, secondary market, performance goal?
Closed Finite life Illiquid Very poor secondary mkt Goal=risk reduction
What are 6 advantages of Managed Products?
- Xp of professional mgmt
- Economies of scale from pooled funds
- Diversification
- Liquidity & flexibility
- Potential tax benefits (LSVCC)
- Low cost options (ETFs)
What are 5 advantages of structured products?
- Xp of pro mgmt
- Economies of scale
- Diversification
- Higher yield
- High probability of return on principal
What are 4 disadvantages of Managed Products?
- Lack of transparency
- Some liquidity constraints
- Some very high fees
- Volatile returns
What are 3 disadvantages of Structured Products?
- Complexity
- High cost
- Illiquidity of secondary mkt
What are some risks common to managed and structured products?
- Credit
- Inflation
- Currency
- Prepayment (MBS)
- Manager
What is a pooled investment fund that is highly regulated and unleveraged?
Mutual funds
What is a pooled fund that is unregulated and leveraged?
Hedge fund
What is a pooled fund that closely tracks the underlying asset(s)?
Exchange Traded Funds
What is a pooled fund with a finite number of units?
Closed End Fund
What is a pooled fund buying full ownership of private firms?
Listed private equity fund
What type has equity shares that provide federal and provincial tax breaks?
Labour sponsored venture capital corporations
What combines a mutual fund with a life insurance policy?
Segregated funds
What is a debt-like security with with equity linked returns? (Uses derivatives and bonds).
Principal protected notes (PPN)
What are bank issued debt securities with returns that are linked to an equity index?
Index-linked GICs
What are equity securities with a separate claim on the dividend and the capital cash flow from a holding of underlying stocks?
Split shares
What are long term subordinated debt with features of preferred shares and corporate bonds?
Canadian originated preferred shares (COPrS)
What are medium to long term bond with equal claim on the principal and interest cash flows from a pool of mortgages?
Mortgage backed securities
What are short to medium term bonds with equal claim on the principal and interest cash pools from a pool of receivables (eg consumer loans)?
Asset backed securities
