What is the fund naming structure?
The fund naming structure identifies index benchmarks, asset class, exposure type and the amount of leverage employed, if applicable. The word “strategy” indicatesthat the fund's investment objective is pursued by using investment choices other than the actual securities of the index.
The purpose of the Names Rule is to prevent fund names from misrepresenting the fund's investments and risks. Typically, a fund's name is the first piece of information that investors receive about a fund and fund names offer important signaling for investors in assessing their investment options.
A fund structure determines a fund's asset investment and associated administrative fees. Fund structures are selected to match the envisioned life of the fund and the frequency of distributions. See various fund structure options below.
Funds are typically structured as either companies, unit trusts or limited partnerships.
1 Specifically, it requires a registered investment company or business development company with a name that suggests it focuses on a particular type of investment or investments in a particular industry, country, or geographic region, or that it suggests certain tax treatment, to invest at least 80% of its assets ...
To build a three-fund portfolio, invest in a total stock market index fund, a total international stock index fund, and a total bond market fund. These can be either mutual funds or ETFs (exchange-traded funds).
The master fund pools the investments of numerous individual investors from multiple feeder funds. Each investor may have a different investment goal, and each feeder fund may be tailored to different investors (e.g., one can appeal to a risk-averse investor, whereas another can appeal to a risk-seeking investor).
A managed fund is open ended, meaning that new units are created as investors join the fund and units are cancelled as investors redeem. There are a number of different roles that are performed in a managed fund by different entities. These include a responsible entity, investment manager and custodian.
The structure of mutual funds in India is three-tiered: the first is the sponsor, the second is the trust and trustee, and the third is the asset management company. These are the participants who play a key role in the management of mutual funds. Each participant has their individual role to play.
The Names Rule currently requires registered investment companies whose names suggest a focus in a particular type of investment to adopt a policy to invest at least 80 percent of the value of their assets in those investments (an “80 percent investment policy”).
How are mutual funds named?
The name of the fund often refers to its target retirement date Page 18 16 | MUTUAL FUNDS AND ETFS or target date. For example, there are funds with names such as “Portfolio 2050,” “Retirement Fund 2050,” or “Target 2050” that are designed for individuals who intend to retire in or near the year 2050.
- Identify your Goals. ...
- Identify you Risk. ...
- Get your Asset Allocation Right. ...
- Understand and Analyse Attributes of Mutual Funds. ...
- Fund Managers' Past Performance and Experience. ...
- Seek Financial Advice.
Examples include the Specialised Investment Fund (SIF), Investment Company in Risk Capital (SICAR) and Reserved Alternative Investment Fund (RAIF). Investor familiarity and comfortability are critical in ensuring the fund's marketability.
The structure of a fund of funds is a limited partnership, similar to that of an individual private equity fund. There is a general partner that operates the FoF and manages the investments, while the limited partners provide the investment capital.
Capital structure refers to the amount of debt and/or equity employed by a firm to fund its operations and finance its assets. A firm's capital structure is typically expressed as a debt-to-equity or debt-to-capital ratio.
On September 20, 2023, the SEC amended the names rule to expand the types of names that could be considered materially deceptive or misleading if a fund does not adopt a policy to invest, under normal circumstances, at least 80% of the value of its assets in the investment focus that the name suggests.
80 Percent Investment Policy Requirement: The Names Rule's existing 80 percent investment policy requirement requires funds whose names suggest a focus on particular investments, industries, or geographical regions to invest at least 80 percent of their fund assets in the type of investment, industry, or geographic ...
Rule 35d-1, initially adopted in 2001, required among other things that certain funds using names suggesting investment in certain types of investments or securities, or in certain countries or geographic regions, to adopt a policy to invest at least 80 percent of its assets in those investments, securities, countries ...
- Keep some money in an emergency fund with instant access. ...
- Clear any debts you have, and never invest using a credit card. ...
- The earlier you get day-to-day money in order, the sooner you can think about investing.
How the One Percent Rule Works. This simple calculation multiplies the purchase price of the property plus any necessary repairs by 1%. The result is a base level of monthly rent. It's also compared to the potential monthly mortgage payment to give the owner a better understanding of the property's monthly cash flow.
What is the 2% rule for retirement?
You would withdraw $40,000 in your first year of retirement. If the cost of living rises 2% that year, you would give yourself a 2% raise the following year, withdrawing $40,800, and so on for the next 30 years.
The umbrella fund structure makes it cheaper for investors to move from one sub-fund to another and saves the investment manager costs relating to regulatory duplication. An umbrella fund can also be set up to provide retirement, death and other benefits to members of a participating employer.
A sinking fund is maintained by companies for bond issues, and is money set aside or saved to pay off a debt or bond. Bonds issued with sinking funds are lower risk since they are backed by the collateral in the fund, and therefore carry lower yields.
Essentially, the total capital gains earned are distributed according to a cascading structure made up of sequential tiers, hence the reference to a waterfall. When one tier's allocation requirements are fully satisfied, the excess funds are then subject to the allocation requirements of the next tier, and so on.
An endowment is a structure used by large non-profit organizations to raise donation capital. The purpose of an endowment is to earn investment income by investing the donated capital. Part of the investment income is used for operations and the rest is reinvested.
