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7 Cards in this Set
- Front
- Back
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Name the four types of mutual fund prospectus |
* Statutory prospectus * summary prospectus *statement of additional information (SAI) *Ommitting prospectus. |
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Define Full (statutory) prospectus |
Full and fair disclosure of all material facts for investment decision. Contains key information in standardized order. Includes: the funds objective, investment policies, sales charge, management expenses, and services offered. It also includes performance history, 1, 5, 10 year performance histories or performance over the life of the fund. Whichever is shorter. |
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Define summary prospectus |
Rule 498:short form that may be used to make the sale. It contains a summary of key information in the prospectus. It contains the fund name, class or classes of shares, the exchange ticker symbol, whether the fund is an ETF, and identification of the principal U.S market or markets in which the funds are traded. It also includes a legend. |
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Define SAI |
Statement of additional information. More optional details for the investor to research. Includes: Balance sheet Statement of operations An income statement An up to date portfolio list. |
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Define rule 482 |
Omitting prospectus. It is an advertisement. It doesn't qualify as a disclosure. |
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Define Subchapter M |
A mutual fund may qualify for subchapter M of the internal revenue code if it acts as a conduit (pipeline theory) It may qualify as a regulated investment company, which allows the investment income to escape taxation at the mutual fund level. |
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What does subchapter M require? |
A fund must distribute at least 90% of net investment income to its shareholders. Otherwise, the fund has to pay taxes on 100% of the net investment. |
