2023 ICI Fact Book Quiz and Flashcards

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What types of investment companies are classified by the Investment Company Act of 1940?

Closed-end funds and open-end funds

Mutual funds and ETFs

Hedge funds and employer-sponsored retirement plans

Unit investment trusts and managed investment companies (correct)

Who enforces and regulates the legislation in the Investment Company Act of 1940?

Securities and Exchange Commission (SEC) (correct)

Commodity Futures Trading Commission (CFTC)

Federal Reserve System (FRS)

Financial Industry Regulatory Authority (FINRA)

What is the main purpose of the Investment Company Act of 1940?

To regulate the stock market

To set interest rates for investment companies

To manage retirement plans for employees

To provide investors with information about their investment objectives, investment policies, and financial condition (correct)

What do investment companies do with funds collected from multiple investors?

Invest in underlying assets Signup and view all the answers

What is the purpose of 12b-1 charges in investment funds?

To cover advertising, promotional literature, and broker commissions Signup and view all the answers

What is the SEC requirement related to fees in investment fund prospectuses?

To provide a consolidated expense table listing all fees Signup and view all the answers

What is the tax status granted to mutual funds?

Pass-through status Signup and view all the answers

What is the gross return for a fund with a NAV of $10, 5% annual expenses, and 14% per share earnings for 2 years?

$1.09 Signup and view all the answers

How do front-end load, back-end load, and annual expense ratio affect the gross return for an investor in a fund?

They reduce the gross return Signup and view all the answers

In a comparison between mutual funds with CDs, what return must a fund with a 3% front-end load and a 0.6% annual expense ratio earn to be a better investment than a CD?

6.4% Signup and view all the answers

What are some advantages of mutual funds?

Record keeping, diversification, professional management, and sometimes lower transaction costs Signup and view all the answers

What is a characteristic of ETFs?

They can be bought and sold anytime like stocks Signup and view all the answers

What is a key difference between mutual funds and hedge funds?

Hedge funds use more speculative policies than mutual funds Signup and view all the answers

What type of securities do mutual funds and hedge funds typically invest in?

Mutual funds buy publicly traded securities, while hedge funds use leverage and short-sales Signup and view all the answers

What is recommended for reviewing in the lecture concepts and terminology related to investment funds?

Managed investment companies, unit investment trusts, loads, ETFs, hedge funds, and asset classes in mutual funds and ETFs Signup and view all the answers

What is the median number of mutual funds owned by individuals in the US?

3 Signup and view all the answers

Which type of funds are sold at net asset value (NAV) to the sponsor and are bought and sold at the end of the day when NAV is calculated?

Open-end mutual funds Signup and view all the answers

What is the typical range of front-end load fees paid when purchasing mutual fund shares?

5-6% Signup and view all the answers

What has happened to trillions of dollars of cumulative cash flows over the last 10 years?

They have been withdrawn from actively managed equity mutual funds and placed in index-based equity ETFs or mutual funds Signup and view all the answers

What is the typical range of back-end load fees incurred when selling mutual fund shares?

4-6% Signup and view all the answers

Where have the majority of mutual and ETF investments in the US been?

Domestic equity, bonds, international equity, and money market securities Signup and view all the answers

What has happened to the concentration of mutual fund and ETF assets managed by the largest fund complexes over time?

It has increased Signup and view all the answers

What is the typical range of operating expenses for mutual funds as a percentage of assets under management?

0.2% - 2% Signup and view all the answers

What has been the trend in the share of assets managed by the five largest firms from 2005 to 2022?

Increased to 55% Signup and view all the answers

How many US-registered investment companies were offered by US financial services companies at year-end 2022?

16,000 Signup and view all the answers

What percentage of households in the US are invested in mutual funds, mostly for retirement purposes?

54.7% Signup and view all the answers

How many ETFs were there in the US at the end of 2023?

2,989 Signup and view all the answers

Study Notes

US Investment Company Institute (ICI) Factbook 2023 Highlights

At the end of 2023, US-registered investment companies held $28.9 trillion in total net assets, with the majority being held by mutual funds and ETFs.
71.7 million households, representing 120.5 million individuals in the US, own funds, with 54.7% of households invested in these funds, mostly for retirement purposes.
The median number of mutual funds owned by individuals is 3, and in the US alone, there were over 8,763 mutual funds and 2,989 ETFs.
The majority of mutual and ETF investments in the US were in domestic equity, bonds, international equity, and money market securities.
Trillions of dollars of cumulative cash flows have been withdrawn from actively managed equity mutual funds and placed in index-based equity ETFs or mutual funds over the last 10 years.
The number of investment companies offered by US financial services companies at year-end 2022 was 16,159, with the majority of investment company assets in equity funds.
The concentration of mutual fund and ETF assets managed by the largest fund complexes has increased over time, with the share of assets managed by the five largest firms rising from 35% in 2005 to 55% in 2022.
Open-end mutual funds are sold at net asset value (NAV) to the sponsor and are bought and sold at the end of the day when NAV is calculated, while closed-end funds are sold at a premium or discount to NAV to other investors.
Common types of mutual funds include money market, equity, specialized sector, bond, distressed firm, value or growth firms, and international indexed funds.
Front-end load fees, which are a commission or sales charge paid when purchasing mutual fund shares, typically range up to 6%, affecting the price paid by investors.
Back-end load fees, incurred when selling mutual fund shares, typically range from 4-6% and may decrease with time, affecting the investor's payoff.
Operating expenses for mutual funds, used to pay for administrative expenses and advisory fees, typically range between 0.2% and 2% of assets under management.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge of the US Investment Company Institute (ICI) Factbook 2023 highlights with this quiz. Explore key insights such as total net assets held by investment companies, household ownership of funds, types of mutual funds and ETFs, cash flow trends, fees, and more.

ICI Factbook 2023 Highlights Quiz

Choose a study mode