22 - Exchange Listed Managed Flashcards

0
Q

What type of closed-end funds have the flexibility to buy back outstanding shares periodically?

A

Interval funds

Or closed-end discretionary funds

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1
Q

How do you buy or sell a closed-end fund?

A

On an exchange at a discount (or premium) to the NAVPS, base on market supply/demand.

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2
Q

What are some advantages of closed-end funds?

A
  1. Short selling
  2. More fully invested (less need for liquidity to pay for redemptions)
  3. Easier to calculated adjusted cost base
  4. Lower MERs
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3
Q

What are disadvantages of closed-end funds?

A
  1. Do not necessarily trade at net asset value
  2. Not widely traded in Canada
  3. Commission paid for buy/sell
  4. No dividend reinvestment
  5. If on foreign exchange, dividends not eligible for dividend tax credit
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4
Q

What are three categories of income trusts?

A

REIT
Royalty or Resource trusts
Business Income trusts

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5
Q

In what 5 ways do ETFs differ from Index Mutual Funds?

A
  1. Trade on exchange
  2. Commissions to buy/sell
  3. Can be short sold
  4. Easy to trade
  5. Price close to NAV at all times
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6
Q

What is a leveraged ETF?

A

ETF that uses borrowed capital to multiply the returns (e.g. Double the gains of an index)

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7
Q

What is an inverse leveraged ETF?

A

Uses leverage, derivatives and short selling to profit when an index falls, and take loses when it rises.

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8
Q

What are the two ways that a Commodity ETF can be structured?

A
  1. Can have physical holding of a commodity (eg Gold)

2. Or can hold derivatives (e.g forward contracts)

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9
Q

What are seven ways that private equity finances firms?

A
  1. Leveraged buyout
  2. Growth capital
  3. Turnaround
  4. Early stage
  5. Late stage
  6. Distressed debt
  7. Infrastructure
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10
Q

What are two advantages of Listed Private Equity?

A
  1. Access to legitimate inside info

2. Influence over mgmt and flexibility of implementation

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11
Q

What are two disadvantages of listed private equity?

A
  1. Illiquid investments

2. Dependence on key personnel

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12
Q

How is the adjusted cost base of an investment in an income trust affected by a distribution that includes return of capital?

A

ACB is Reduced

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