Types of Investment Funds in Canada

Questions and Answers

To generate returns with a focus on absolute returns (correct)

To track a specific market index

To pool money from many investors to invest in a variety of assets

To raise capital through an initial public offering

To provide financial advice to investors

To regulate the investment fund industry

To manage investment funds (correct)

To sell investment funds to investors

A regulation that outlines the requirements for investment fund managers

A regulation that outlines the requirements for investors

A regulation that outlines the requirements for distributors

A regulation that outlines the requirements for investment funds (correct)

A fee charged by investment fund managers to cover the costs of managing the fund Signup and view all the answers

To sell investment funds to investors Signup and view all the answers

A type of investment fund that trades on a stock exchange like individual stocks Signup and view all the answers

A regulation that outlines the requirements for investment fund managers Signup and view all the answers

A fee paid by investment fund managers to distributors for selling their funds Signup and view all the answers

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.