RSM230H1 Lecture Notes - Lecture 8: Money Market Fund, Life Insurance, Term Life Insurance
26 Nov 2016
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Nav = (market value assets accrued liabilities) / units outstanding. Features of legal structures used to invest collectively. Creates/redeems units directly: ex: if you want to buy a unit of open-ended funds, the fund will create new units and they are not transferrable between investors. Nav will increase if share prices increases. If people buy more units, nav stays the same. Price reflects only underlying asset and cost for it. Nav reflects assets, liabilities and market pressure and illiquidity. If not a lot of people selling their units, and there is a lot of buyers, the unit price will be pushed up. Hybrid of both close ended and open ended funds (cid:862)fi(cid:454)ed(cid:863) # of units. If pricing anomalies start showing up, etf can create or redeem units. Management expense ratio (mer) is an ongoing annual fee automatically paid from assets under management (aum) to pay for fund services. 2% of fee is 2% of your total.
