Chapter 17 Mutual Funds: Structure and Regulation KT Flashcards
An investment fund that uses proceeds from redeemable shares and units sold to investors to buy investments.
mutual fund
A firm that holds the securities belonging to a mutual fund or a segregated fund for safekeeping.
custodian
A sales charge applied on the redemption of a mutual fund.
back-end load
The total expense of operating a mutual fund expressed as a percentage of the fund’s net asset value.
management expense ratio
A disclosure document designed to give mutual fund investors key information about a fund.
Fund Facts
A sales charge applied to the purchase price of a mutual fund when the fund is originally purchased.
front-end load
A type of fee-based fund with a lower MER designed to accommodate fee-based financial advisors by reducing or eliminating the double charge.
F-class fund
Appointed by a company to maintain records of who owns the mutual fund’s shares, and is often also the transfer agent.
registrar
A fee charged by a mutual fund when an investor exchanges units of one fund for another in the same fund company.
switching fees
What type of fund managers make investment decisions based on their outlook for the markets and securities in which they invest, as opposed for following a passive buy-and-hold strategy?
active management
Fee that a mutual fund manager may pay to the individual or organization that sold the fund for providing services such as investment advice, tax guidance and financial statements to investors.
trailer fee
A pre-authorized plan to make regular purchases in small amounts.
pre-authorized contribution plan
The total price that an investor pays to purchase shares in a mutual fund.
offering price
A fund that does not charge a fee to purchase or redeem units.
no-load fund
A condensed prospectus distributed by mutual fund companies upon request to purchasers and potential purchasers of fund units or shares.
simplified prospectus
