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9 Cards in this Set
- Front
- Back
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3 Types of Investment Companies |
1. Open-Ended Companies 2. Closed-Ended Companies 3. Unit Investment Trusts |
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Open-Ended Company |
A type of investment company that offers mutual funds that do not have restrictions on the amount of shares the fund can issue. Purchasing shares creates new ones, whereas selling shares takes them out of circulation. |
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Closed-Ended Company |
A publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange. A mutual fund or hedge fund that does not accept investments from those who are not already existing investors in such funds. |
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Unit Investment Trusts |
An investment company that offers a fixed portfolio, generally of stocks and bonds, as redeemable units to investors for a specific period of time. It is designed to provide capital appreciation and/or dividend income. There is no active management. |
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Mutual Fund |
Pool of funds, from different investors, for the purpose of investing in securities. Funds are managed by professional investors and the Portfolio of Funds is structured and maintained in accordance with the Fund's objectives that are listed in the Prospectus of the fund. The Net Asset value (NAV) is calculated once at the end of every trading day. |
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Exchange-traded Fund (ETF) |
A marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, it trades like a common stock on a stock exchange and experience price changes throughout the day as they are bought and sold. They typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors. Because it trades like a stock, it does not have its net asset value (NAV) calculated once at the end of every day like a mutual fund does. |
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Securities |
A financial instrument that represents an ownership position in a 1) publicly-traded corporation (stock), 2) a creditor relationship with governmental body or a corporation (bond), or 3) rights to ownership as represented by an option. A security is a fungible, negotiable financial instrument that represents some type of financial value. |
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Issuer |
The company or entity that issues the security. |
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Net Asset Value (NAV) |
A mutual fund's price per share or exchange-traded fund's (ETF) per-share value. The per-share dollar amount of the fund is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding. |
