Term
| Investment company functions |
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Definition
Administration & record keeping
Diversification & divisibility
Professional management
Reduced transaction costs |
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Term
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Definition
| (Market Value of Assets - Liabilities)/ Shares Outstanding |
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Term
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Definition
| shares outstanding change when new shares are sold or old shares are redeemed Priced at Net Asset Value(NAV) |
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Term
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Definition
no change in shares outstanding unless new stock is offered
Priced at Premium or discount to NAV |
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Term
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Definition
Direct-marketed funds
Sales force distributed
Revenue sharing on sales force distributed
Potential conflicts of interest
Financial Supermarkets |
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Term
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Definition
| paid to investment intermediaries (financial planners, brokers, investment advisors) as sales commissions |
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Term
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Definition
| A fee (sales charge or load) that investors pay when selling mutual fund shares within a specified number of years |
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Term
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Definition
distribution costs paid by the fund
Alternative to a load |
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Term
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Definition
| allowing some investors to purchase or sell later than other investors |
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Term
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Definition
| allowing investors to buy or sell on stale net asset values |
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Term
| Pass-through status under the U.S. tax code |
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Definition
| Taxes are paid only by the investor |
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Term
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Definition
| allow investors to trade index portfolios like shares of stock |
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Term
| Potential advantages of ETF |
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Definition
Lower taxes
Trade continuously
Lower costs |
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Term
| Potential disadvantages of ETF |
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Definition
| Prices can depart by small amounts from NAV |
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Term
| average mutual fund performance |
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Definition
| generally less than broad market performance |
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