Podcast
Questions and Answers
What is one of the main reasons for investing collectively in an investment fund?
What is one of the main reasons for investing collectively in an investment fund?
- To avoid paying any fees for managing the fund
- To have full control over the investments made
- To access the investing skills of the fund manager (correct)
- To guarantee superior results during market downturns
Why might an investor end up spending a large amount on commission if they make individual purchases?
Why might an investor end up spending a large amount on commission if they make individual purchases?
- For easier diversification across different sectors
- Due to minimum commission rates on each purchase (correct)
- As a result of guaranteed high profits on individual investments
- Because individual purchases attract higher taxes
What is one of the drawbacks of actively managed investment funds mentioned in the text?
What is one of the drawbacks of actively managed investment funds mentioned in the text?
- They offer diversification across different investments
- They often fail to beat their benchmarks (correct)
- They have lower entry fees compared to passive funds
- They guarantee higher returns during market downturns
What purpose do the fees charged by fund managers serve as mentioned in the text?
What purpose do the fees charged by fund managers serve as mentioned in the text?
Why do few investors choose to manage their portfolios without professional help?
Why do few investors choose to manage their portfolios without professional help?
Why might an investor choose to invest in an investment fund rather than making individual purchases?
Why might an investor choose to invest in an investment fund rather than making individual purchases?
What is a key advantage of investing in an investment fund with pooled investments?
What is a key advantage of investing in an investment fund with pooled investments?
What is one reason why investment funds might choose to invest in shares from different sectors?
What is one reason why investment funds might choose to invest in shares from different sectors?
What is one of the purposes of the fees charged by fund managers for their services?
What is one of the purposes of the fees charged by fund managers for their services?
Why do some investors opt for passive investing over actively managed funds, according to the text?
Why do some investors opt for passive investing over actively managed funds, according to the text?
What is a potential drawback of employing indexation?
What is a potential drawback of employing indexation?
How does the timing of dividend reinvestment differ between passive funds and most indices?
How does the timing of dividend reinvestment differ between passive funds and most indices?
What can lead to a tracking error in passive portfolios?
What can lead to a tracking error in passive portfolios?
Why do index funds assume dividends are reinvested on the ex-dividend date?
Why do index funds assume dividends are reinvested on the ex-dividend date?
What is a key assumption underlying the concept of indexation?
What is a key assumption underlying the concept of indexation?
What is the primary role of the unit trust manager in a unit trust?
What is the primary role of the unit trust manager in a unit trust?
What is the purpose of the bid price in unit trusts?
What is the purpose of the bid price in unit trusts?
How are the units in a unit trust priced on a daily basis?
How are the units in a unit trust priced on a daily basis?
Why are unit trusts described as dual-priced investments?
Why are unit trusts described as dual-priced investments?
What does the bid-offer spread represent in unit trusts?
What does the bid-offer spread represent in unit trusts?
What differentiates a trustee from a unit trust manager in a unit trust?
What differentiates a trustee from a unit trust manager in a unit trust?
How are unit trust prices calculated based on the NAV?
How are unit trust prices calculated based on the NAV?
In a unit trust, what role does the trustee play with regard to asset ownership?
In a unit trust, what role does the trustee play with regard to asset ownership?
What is a distinguishing factor between open-ended funds and unit trusts mentioned in the text?
What is a distinguishing factor between open-ended funds and unit trusts mentioned in the text?
Why might large banks or insurance companies be common trustees of unit trusts?
Why might large banks or insurance companies be common trustees of unit trusts?
What is the primary role of an authorised corporate director (ACD) in an OEIC?
What is the primary role of an authorised corporate director (ACD) in an OEIC?
How is the structure of an OEIC similar to a SICAV?
How is the structure of an OEIC similar to a SICAV?
What is a distinguishing feature of an OEIC being single-priced?
What is a distinguishing feature of an OEIC being single-priced?
How does the role of an OEIC depository compare to that of a trustee in a unit trust?
How does the role of an OEIC depository compare to that of a trustee in a unit trust?
What does the term 'OEIC' stand for and where is it predominantly used?
What does the term 'OEIC' stand for and where is it predominantly used?
What key characteristic differentiates an investment trust from a unit trust?
What key characteristic differentiates an investment trust from a unit trust?
Which statement accurately describes a feature of investment trust companies?
Which statement accurately describes a feature of investment trust companies?
What is a common distinguishing feature of split capital investment trusts?
What is a common distinguishing feature of split capital investment trusts?
What enables some investment trust companies to invest in a broader portfolio of stocks and shares?
What enables some investment trust companies to invest in a broader portfolio of stocks and shares?
In what way do investment trusts differ from OEICs and unit trusts with regard to borrowing money?
In what way do investment trusts differ from OEICs and unit trusts with regard to borrowing money?
What type of management style is employed by ETFs, as described in the text?
What type of management style is employed by ETFs, as described in the text?
Which type of indices do most index tracker funds, including ETFs, typically follow?
Which type of indices do most index tracker funds, including ETFs, typically follow?
How do ETFs differ from investment trusts in terms of fund size?
How do ETFs differ from investment trusts in terms of fund size?
What is the primary goal of passive investment management in ETFs?
What is the primary goal of passive investment management in ETFs?
How does an ETF ensure that its portfolio's performance aligns with the market index it is tracking?
How does an ETF ensure that its portfolio's performance aligns with the market index it is tracking?
Which index replication method is the most expensive but also the most accurate?
Which index replication method is the most expensive but also the most accurate?
What is a downside of using the stratified sampling method for index replication?
What is a downside of using the stratified sampling method for index replication?
In synthetic replication, what risk is the investor exposed to?
In synthetic replication, what risk is the investor exposed to?
What is a characteristic of ETF shares trading on the stock exchange?
What is a characteristic of ETF shares trading on the stock exchange?
What charge is typically deducted from investment funds?
What charge is typically deducted from investment funds?
Which characteristic makes hedge funds inaccessible to most private individuals?
Which characteristic makes hedge funds inaccessible to most private individuals?
What is a key feature that allows hedge funds to potentially enhance returns?
What is a key feature that allows hedge funds to potentially enhance returns?
What investment style are hedge funds generally aimed at producing?
What investment style are hedge funds generally aimed at producing?
What does the imposition of an initial 'lock-in' period in hedge funds help maximize?
What does the imposition of an initial 'lock-in' period in hedge funds help maximize?
What is a common fee structure characteristic of hedge funds?
What is a common fee structure characteristic of hedge funds?
What is the primary goal of traditional 'absolute return' hedge funds?
What is the primary goal of traditional 'absolute return' hedge funds?
How do hedge funds aim to profit regardless of general market movements?
How do hedge funds aim to profit regardless of general market movements?
What distinguishes traditional 'absolute return' hedge funds from other hedge fund styles?
What distinguishes traditional 'absolute return' hedge funds from other hedge fund styles?
Which factor has led to a wide range of complex hedge fund strategies according to the text?
Which factor has led to a wide range of complex hedge fund strategies according to the text?
What is one of the key reasons why generalizing about hedge funds is cautioned against?
What is one of the key reasons why generalizing about hedge funds is cautioned against?
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