Managed Products Chapter Overview

A pooled investment that's structured as an insurance product. Insurance companies use investor funds to buy assets, then sell units to investors.

A financial product where the insurance company acts as the main intermediary/distributor.

A fund where money from several investors is combined to invest in a portfolio of assets.

A type of managed fund pooling investor money to purchase various securities.

The specific guidelines of how the invested funds need to be managed.

The minimum amount an insurance company guarantees to pay to beneficiaries upon the death of a policyholder, even if the market value of the policy is lower.

The actual value of the segregated fund at the time of the policyholder's death, reflecting the performance of the underlying investments.

The final sum received by the beneficiary. It is either the death benefit guarantee, the market value at death, or the greater of the two.

The beneficiary receives the death benefit guarantee amount, which is higher than the market value of the fund.

The beneficiary receives the market value at death, which surpasses the death benefit guarantee.

The beneficiary receives the death benefit guarantee amount, which is equal to the market value of the fund.

Segregated funds offer protection from creditors in case of bankruptcy because the assets are owned by the insurance company, not the policyholder.

A feature where assets are shielded from being seized by creditors to recover debt, offering security to individuals and businesses facing financial hardship.

A purchase made with genuine intent and not as a deceitful strategy to avoid potential creditor claims.

Specifying the person(s) who will receive the proceeds of an investment, insurance, or other financial product upon the owner's death.

Passing assets directly to beneficiaries without going through the legal process of estate administration.

The legal process of distributing a deceased person's assets according to their will or intestacy laws.

Expenses associated with segregated funds, including management fees, death benefits, and maturity guarantees.

Segregated funds are usually exempt from being divided among creditors during bankruptcy.

Segregated fund proceeds may not be protected if the purchase was made within a year before bankruptcy.

An individual appointed by a bankruptcy court to manage the debtor's assets and distribute them fairly to creditors.

Investors might need to repay tax credits received when redeeming Life Skills Venture Capital Corporation (LSVCC) shares early, before a specified holding period.

LSVCCs have higher costs due to the labor-intensive nature of venture capital investing. These costs are reflected in higher management expense ratios (MERs) compared to conventional equity funds.

A type of pooled investment fund where investors buy a fixed number of shares at the initial offering. The fund manager invests the collected capital in a portfolio of securities.

Closed-end fund units are traded on stock exchanges where investors buy or sell through brokers, incurring trading commissions, rather than front-end loads.

The price of closed-end fund units is determined by market supply and demand, fluctuates based on the underlying asset value, and may trade at a discount, par, or premium.

Closed-end funds often trade at a discount to their net asset value per share (NAVPS), which is the total value of the fund's assets minus liabilities divided by the number of shares.

A higher discount can indicate negative market sentiment towards the fund, but a significant discount compared to historical norms needs further investigation.

The management fees charged by closed-end funds are generally lower than those charged by mutual funds with a similar investment objective.

Closed-end funds need to keep a large cash reserve to cover potential redemptions, which can drag down fund performance during periods of market growth.