Types of Investment Funds in Canada

Study Notes

Mutual Funds: A type of investment fund that pools money from many investors to invest in a variety of assets, such as stocks, bonds, and other securities.
Exchange-Traded Funds (ETFs): A type of investment fund that tracks a specific index, commodity, or currency, and trades on a stock exchange like individual stocks.
Index Funds: A type of mutual fund that tracks a specific market index, such as the S&P/TSX Composite Index.
Closed-End Funds: A type of investment fund that raises capital through an initial public offering and then lists on a stock exchange.
Hedge Funds: A type of investment fund that uses various investment strategies to generate returns, often with a focus on absolute returns rather than relative returns.

Investment Fund Managers: Companies that manage investment funds, such as TD Asset Management, RBC Global Asset Management, and BlackRock Canada.
Distributors: Companies that sell investment funds to investors, such as banks, credit unions, and online brokerages.
Regulatory Bodies: Organizations that oversee the investment fund industry, such as the Canadian Securities Administrators (CSA) and the Mutual Fund Dealers Association of Canada (MFDA).

National Instrument 81-102: A regulation that outlines the requirements for investment funds, including disclosure, governance, and operational requirements.
National Instrument 81-106: A regulation that outlines the requirements for investment fund managers, including registration, compliance, and disclosure requirements.

Management Expense Ratio (MER): A fee charged by investment fund managers to cover the costs of managing the fund.
Trailer Fees: A fee paid by investment fund managers to distributors for selling their funds.
Sales Charges: Fees charged to investors when they purchase or redeem investment fund units.
Other Fees: Fees charged for services such as record-keeping, auditing, and legal fees.

Registered Retirement Savings Plan (RRSP): A tax-deferred savings plan that allows Canadians to invest in investment funds for retirement.
Tax-Free Savings Account (TFSA): A savings account that allows Canadians to invest in investment funds without paying taxes on the investment earnings.
Non-Registered Accounts: Investment accounts that do not offer tax benefits, but provide flexibility and access to investment funds.

Mutual Funds: pool money from many investors to invest in various assets like stocks, bonds, and securities.
Exchange-Traded Funds (ETFs): track a specific index, commodity, or currency, and trade on a stock exchange like individual stocks.
Index Funds: type of mutual fund that tracks a specific market index, like the S&P/TSX Composite Index.
Closed-End Funds: raise capital through an initial public offering and then list on a stock exchange.
Hedge Funds: use various investment strategies to generate returns, often focusing on absolute returns rather than relative returns.

Investment Fund Managers: companies that manage investment funds, such as TD Asset Management, RBC Global Asset Management, and BlackRock Canada.
Distributors: companies that sell investment funds to investors, including banks, credit unions, and online brokerages.
Regulatory Bodies: organizations that oversee the investment fund industry, like the Canadian Securities Administrators (CSA) and the Mutual Fund Dealers Association of Canada (MFDA).

National Instrument 81-102: outlines requirements for investment funds, including disclosure, governance, and operational requirements.
National Instrument 81-106: outlines requirements for investment fund managers, including registration, compliance, and disclosure requirements.

Management Expense Ratio (MER): fee charged by investment fund managers to cover management costs.
Trailer Fees: fee paid by investment fund managers to distributors for selling their funds.
Sales Charges: fees charged to investors when they purchase or redeem investment fund units.
Other Fees: fees for services like record-keeping, auditing, and legal fees.

Registered Retirement Savings Plan (RRSP): tax-deferred savings plan for retirement investments.
Tax-Free Savings Account (TFSA): savings account for investment earnings without taxes.
Non-Registered Accounts: investment accounts without tax benefits, but providing flexibility and access to investment funds.