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12 Cards in this Set

  • Front
  • Back
What is Net asset value equal?
NAV = market values of assets minus liabilities/shares outstanding
What are unit investment trusts?
pools of money invested in a portfolio that is fixed for the life of the fund; unmanaged- lower fees; usually invest in munis or corporate bonds; investors can sell holdings back to trustees for NAV
What are the two types of managed companies?
1. closed-end
2. open-end
What is an open-end fund?
fund issues or redeems shares at NAV
What is a closed-end fund?
investors must sell their shares to other investors; shares are traded on organized exchanges; price can differ from NAV
What are commingled funds?
partnerships of investors pool their funds; organized/managed by a bank or insurance company; trust or retirement accounts; too small to warrant managing on a separate basis
What are Real Estate Investment Trusts (REITs)?
similar to a closed-end fund; invest in real estate or loans secured by real estate
What are hedge funds?
private partnerships, minimal SEC regulation; lock up period allow managers to buy up illiquid assets; 2% of assets, 20% of revenues
What are 12b-1 fees?
SEC allows managers of 12b-1 funds to use fund assets to pay for costs such as advertising and broker commissions; paid annually
What are soft dollars?
mutual fund managers get kick back from brokerage firms by using them for trades
What is turnover?
ratio of the trading activity of a portfolio to the assets of the portfolio; if lots of turnover, investor cannot manage his overall tax obligation
What are Exchange-Traded Funds (ETFs)?
allow investors to trade index portfolios just as they do shares of stock; can be traded throughout the day not just at the end at NAV; unit investment trust holding say the S&P500 (SPDR); can be sold short or bought on margin; when mutual fund hold redeem shares capital gains taxes can be triggered; in ETFs you sell your shares to other traders, no capital gains realized for whole fund; can exchange ETF for the actual stocks, less price spread; can be cheaper, deal only with a broker