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
International Funds
Invests ONLY in International Securities and EXCLUDES US securities
Fund Expenses
- No Load Funds
○ DO NOT charge a sales commission when purchased or redeemed - Load Funds
○ Charge a sale commission when purchased or redeemed
○ Examples:
A Shares
B Shares
C shares
A Shares
B Shares
C Shares
ETFs
REITs
American Depository Receipts (ADRs)
Alternative Invesments
Common Alt. Investments
Real-Estate
REITS
CMOs
Limited Partnerships
Other Alternative Investments and Highlights
