Investment Funds chp 7

Which type of investment involves an individual personally buying shares in a company?

What is the term used for funds that pool the resources of many investors to provide access to a range of investments?

Which type of fund can create new shares in response to investor demand or cancel them when sold?

What is another name for open-ended investment companies (OEICs)?

Which type of investment vehicle includes the term 'internationally recognised'?

In which type of investment, investors find indirect investment very attractive due to the requirement of a significant amount of money for direct investments?

What type of fund has a fixed capital base and allows investors to buy and sell shares on the stock exchange?

Where are investment funds often structured as Société d’Investissement à Capital Variable (SICAV)?

What type of funds comply with the rules of the EU UCITS directive and are often marketed internationally?

What is one of the benefits of investing in collective investment funds?

Why might an investor choose to invest in a diversified portfolio of investments?

Which region has one of the widest ranges of funds available in the Gulf region?

What type of funds are categorised under 'income' and 'growth'?

In core-satellite management, what does the 'core' typically refer to?

What is a common characteristic of actively managed funds compared to passively managed funds?

What distinguishes the top-down approach in active management from the bottom-up approach?

How does combining index-trackers with actively managed funds minimize risk?

'Momentum investing' involves picking shares based on what criteria?

'Value investing' primarily involves selecting shares of companies that are:

'Contrarian investing' differs from 'momentum investing' in that it focuses on:

'Smart beta funds' aim to combine elements of both traditional passive and active investing by targeting what type of investment ideas?

'Bottom-up' analysis in active management prioritizes examining which aspect of a company?

What pricing method is commonly used by most OEICs?

Who is considered the legal owner of the fund investments in an OEIC structure?

What is the role of the ACD in an OEIC?

How are dealing expenses and commissions typically handled in single-priced funds?

What distinguishes single-pricing from dual-pricing in OEICs?

What is the key characteristic that distinguishes a mutual fund from other types of investment funds?

How do investors typically buy mutual fund shares?

Which entity values the investment portfolio of a mutual fund daily to determine the NAV?

What is the basis for the price investors pay when buying mutual fund shares?

How often must mutual funds redeem or buy back investors' shares?

What are some of the costs involved in operating a mutual fund?

In what way do mutual funds pass along operating costs to investors?

What is the tax treatment for income generated by a tax-exempt mutual fund?

Which entity requires mutual funds to distribute capital gains to shareholders annually?

Where can investors find the Net Asset Value (NAV) of a mutual fund?

What is the main type of open-ended fund encountered in Europe that translates to an open-ended investment company?

In Europe, what are the three main types of funds encountered?

What structure are FCPs based on in Europe?

What does UCITS refer to in Europe?

Which type of fund is typically valued daily in Europe?

What is the legal structure of a SICAV?

What is a key characteristic of SICAVs in terms of share dealings?

Who is responsible for the day-to-day management of a unit trust fund?

What is the role of the trustee in a unit trust?

Why are unit trusts described as 'dual-priced'?

What is the main function of an authorised corporate director (ACD) in an OEIC?

In an OEIC, what is the role of the depository?

What distinguishes a unit trust from an OEIC in terms of pricing?

Which party ensures that an investor receives a price if they are selling their units in a unit trust?

What does the trustee in a unit trust primarily aim to do?

What makes unit trusts different from SICAVs and OEICs in terms of pricing mechanism?

What is the fundamental difference between unit trusts and OEICs regarding the management structure?

Why might an investor consider investing in a closed-ended fund?

What is the primary advantage of pooling resources in investment funds?

How does diversification in an investment portfolio help mitigate risk?

Which legal structure is commonly used for investment funds established in Luxembourg for international marketing?

Why might an individual investor choose an OEIC over direct investments?

What is a distinguishing feature of UCITS funds marketed in the Middle East and Asia?

How do closed-ended funds differ from open-ended funds regarding their capital base?

What is the primary reason behind the establishment of investment funds in the UK, Ireland, and Jersey?

Why might an investor be attracted to investing in a diversified portfolio of investments?

What role does the UCITS branding play in international marketing of investment funds?

What is the primary reason for investing in an investment fund?

Why do investment funds charge fees to investors?

What is one of the disadvantages of adopting indexation in investment funds?

Why are passive portfolios generally less expensive to run than active portfolios?

What is the main rationale for investing collectively in an investment fund?

What does passive management involve in investment funds?

True or False: Passive portfolios are generally more expensive to run than active portfolios.

True or False: Indexation assumes that securities markets are not efficiently priced and can be consistently outperformed.

True or False: The main disadvantage of adopting indexation is managing cash flows and rebalancing portfolios.

What distinguishes closed-ended investment companies from open-ended funds in terms of capital?

Which term is used in the US to refer to closed-ended investment companies?

What is the primary reason for closed-ended investment companies being referred to as 'closed-ended'?

How do investors typically buy shares of closed-ended investment companies?

What aspect distinguishes closed-end funds in the US from unit investment trusts?

In what way do closed-ended investment companies differ structurally from mutual funds?

What is the primary way a private equity firm achieves its principal return?

How do private equity firms typically raise their capital?

What is a common structure used for private equity arrangements?

Why do individuals or institutions use pooled vehicles to invest in private equity?

What is a characteristic feature of private equity arrangements compared to retail investment funds?

In what ways have methods of raising private equity investment changed with the increasing amount of funds raised?

What is the main advantage of physical replication over synthetic replication in ETFs?

Which method of index replication used in ETFs is considered subjective due to the lack of statistical analysis?

What is the primary downside of using synthetic replication in ETFs?

Why does physical replication in ETFs require a large portfolio?

What is the primary purpose of using optimisation in ETFs for index replication?

Which characteristic differentiates ETFs from investment trusts in terms of fund size?

What is one key difference between physical and synthetic ETF replication methods?

Why do ETF shares trade at a premium or discount to the underlying investments?

What role does passive management play in ETFs?

What is a common characteristic of hedge funds, as mentioned in the text?

What distinguishes an investment trust from a unit trust in terms of trading securities?

Which type of investment trust is commonly referred to as a unit investment trust (UIT)?

In traditional 'absolute return' hedge funds, what is the primary aim regarding market movements?

What does the term 'gearing' refer to in the context of hedge funds?

What is a distinguishing feature of zero dividend preference (ZDP) shares in investment trusts?

What is a key characteristic of private equity investments as discussed in the text?

How are share prices for closed-ended investment companies determined?

What does attracting private equity investment involve for a firm, according to the text?

What is one major advantage investment trust companies have over OEICs and unit trusts in terms of investing?

What is a distinguishing feature of private equity compared to traditional loans?

In contrast with unit trusts, how do investment trust companies handle borrowing money?

What aspect of private equity investments makes investors face the risk of failure, similar to other shareholders?

What distinguishes convertible preference shares from zero dividend preference (ZDP) shares in investment trusts?

What allows owners of UIT units to sell them back to sponsors and lets other investors buy UIT units?

'Core-satellite management' typically refers to what in private equity investments?

'Momentum investing' primarily involves picking shares based on what criteria?

What type of fund typically organizes as closed-end funds due to their focus on markets with more illiquid securities?

What is a feature that distinguishes hedge funds from traditional mutual funds?

What is the main difference between an investment trust and unit trust's approach to trading securities?

What is the primary reason investment trust company shares generally trade at a discount to their NAV?

Why might investment trusts trade at a discount if fund managers charge fees but fail to add value to investments?

What can contribute to a smaller discount (or even a premium) in investment trusts nearing winding-up or undergoing corporate activity?

What is one reason often suggested for the discounts in closed-ended funds like investment trust companies?

How do Real Estate Investment Trusts (REITs) differ from traditional property company investments regarding taxation?

What feature of REITs enables investors to access property returns without facing the risk of double taxation?

What risk does investing in Real Estate Investment Trusts (REITs) help mitigate compared to holding direct property?

What is a distinguishing feature of Real Estate Investment Trusts (REITs) compared to traditional property investments regarding liquidity risk?

What role does REITs play in providing access to property returns without facing double taxation?

What could be a potential disadvantage of REITs in comparison to traditional property investments?

How does the taxation method for Real Estate Investment Trusts (REITs) differ from that of traditional property company shares?