2e Collective Investment Schemes Flashcards
Unit trust - what is the trust deed and who are professionals involved?
Trust deed forms hte constituion of the unit trust and is drawn up by the manager and the trustee.
Professionals:
Unit trust manager
Trustee
Investment manager
Types of unit trusts?
Regulated schemes (can be to RCs)
Unregulated schemes (like HF not allowed for RCs)
What is an NMPI
Non mainstream pooled investment - not regulated scheme basically like a hedge fund
What is another name for offshore fund?
Essentially a uni trust but it is domiciled overseas
Unit trust - where is the price stated?
In the prospectus or agreed between manager and trustee
What happens if demand exists for further units?
Investor can provide the manager with the funds and new units are created
What happens when an investor cashes in their units?
Manager can cancel the units or redeem the units.
Pricing of UTs?
No secondary market - only bought and sold from manager.
UT - taxes?
Pay corp tax on income except UK divis at rate of 20%
ICVCs - constitution?
Key document is hte instrument of incorporation
Professionals involved in ICVCs?
The authorised Corporate director (ACD) is repsonsible for investment decisions and pricing - like a fund manager.
Depositary - has custody of scheme assets (like a trustee)
ICVCs - buying and selling of shares?
No secondary market - only bought and sold from ACD
ITC - features?
Company with a fixed share cpaital whose shares are listed on LSE
Closed-ended - don’t normally expand or contract in size after launch
ITC - who are they government by?
Companies Act, LSE requirements, tax law
ITC - buying and selling of shares?
Only through secondary market on LSE
ITC - tax?
Pays corp tx on income (ex. UK divi) at rate of 19%
ETF - similarities to unit trust/ICVC and ITCs?
Open ended like UT/ICVC and traded on secondary mkt (like ITC)
Min investment required for HFs?
£50,000, some exceed £1mn
UT, OEIC/ICVC, ITC: legal structure
UT: trust
ICVC: company
ITC: company
UT, OEIC/ICVC, ITC: open or closed?
UT: open ended
ICVC: open ended
ITC: closed ended
UT, OEIC/ICVC, ITC: holdings?
UT: units
ICVC: shares
ITC: shares
UT, OEIC/ICVC, ITC: investment rules
UT: defined rules
ICVC: defined rules
ITC: flexibility
UT, OEIC/ICVC, ITC: borrowing powers?
UT: limited ability
ICVC: limited ability
ITC: can borrow - leverage/gearing
UT, OEIC/ICVC, ITC: price system?
UT: bid - offer (dual)
ICVC: single
IT: bid - offer (dual)
UT, OEIC/ICVC, ITC: value?
UT: NAV
ICVC: NAV
ITC: Mkt sentiment
