Investment Companies (L7) Flashcards
Closed End
Open End
Unit Invesment Trust (UIT)
Types of MF
- Aggressive Growth
- Growth
- Growth and Income
- Value Fund
- Balanced Fund
- Bond Fund
- Money Market Funds
- Index Fund
- Sector Funds
- Asset Allocation Funds or Lifecycle Funds
- Global Funds
- International Funds
Aggressive Growth Fund
○ Invest in Small Caps
○ Offers the greatest potential for capital appreciation
Growth Fund
○ Invests in Equities that have a HIGH PE
○ Little to no dividends
○ Growing earnings and revenue rapidly
Growth and Income Fund
○ Invests in Equities and Income Producing Assets
Primary Objective = provide capital appreciation and income
Value Fund
○ Invests in UNDERVALUED funds that have LOW PE
○ High Dividend Yields
○ Positive Future Outlook
Balanced Fund
○ Invests in more bonds than a typical equity fund
○ Seeks a well-balanced return in the form of both income and capital appreciation
Bond Fund
Provides investors with a liquid bond investment that is cost effective and fairly conservative
Money Market Funds
○ HIGHLY LIQUID
○ Appropriate for emergency fund
○ Invests in securities with maturities of LESS than 90 days
Index Fund
- Tracks the performance of various market indices
- Passive Investment Strategy
- Tax Efficient
- Low Turnover rates
○ Minimizes capital gains distributions
Sector Funds
- Invest in sectors of the US economy
○ Telecommunications
○ Healthcare
○ Financial services - NOT well-diversified
- LOW R-Squared (0.50- 0.60)
Asset Allocation Funds or Lifecycle Funds
- Well Diversified portfolios including:
○ Stocks
○ Fixed Income
○ International Securities
○ Money Market Securities - As market conditions change OR as the investor gets closer to retirement goal, the asset allocation changes
Global Funds
Invest in international and US Securities
A Shares
B Shares
C Shares
ETFs
REITs
American Depository Receipts (ADRs)
Alternative Invesments
Other Alternative Investments and Highlights
