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Investing - Unit 4
Investing - Mutual Funds
| Question | Answer |
|---|---|
| A means of pooling funds of a large group of investors with similar objectives, the buy and sell decisions are made by fund managers | Mutual Funds |
| Diversification, Professional Management, Modest Capital Investment, Services Offered | Advantages of Mutual Funds |
| Investors buy and sell back to the fund itself, no limit to the number of shares a fund can issue | Open End Fund |
| (Total Market Value - Liabilities)/ # of shares outstanding | Net Asset Value |
| Commission when shares are bought (front-end) or sold (back-end) | Load |
| Allows funds to spend up to 1% of the funds assets to cover marketing costs & distribution | 12b-1 |
| Fees to pay the fund manager, .25 to 1.75 per year | Management Fee |
| Lower 12b-1 Fees, Breakpoints, Long Time Horizon, ideal for large investments | Class A Shares |
| No Front-End Loads, No Breakpoints, Deferred Sales Charges, Conversion to Class A Shares, Higher Expense Ratios, Little investment cash, Long Time Horizon | Class B Shares |
| No front-end load, no breakpoints, small back-end loat that can be eliminated after 1 year, high expense ration, no conversion to class a shares, ideal for short-term horizon | Class C Shares |
| Identifies the process of investing by fund managers that leads them to pick certain funds types: Growth, Value, Company Size | Style Analysis |
| Managers that pick Funds that have earnings that grow rapidly | Growth Managers |
| Managers that are bargain hunters, they seek stocks with low prices compared to the value | Value Managers |
Created by:
mryan396
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