Mutual Funds and ETFs

Mutual Funds and ETFs - MutualFundsandETFs Dr.DavidKrause...

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Mutual Funds and ETFs Dr. David Krause Marquette University FINA 4082
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Mutual Funds (regulated by SEC  through Investment Company Act of  1940) Open-end investment companies are funds that  continue to sell and repurchase shares after their  initial public offerings.  They will buy or sell these shares at net asset value  (NAV). There may be a sales or redemption fee  charged for the transaction.  Closed-end investment companies are initiated  through a stock offering to raise funds.  The fund does not issue or redeem shares after the  initial offering. Shares are traded in the public markets  and are priced by supply and demand.  Dr. Krause, Marquette, FINA 4082
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Dr. Krause, Marquette, FINA 4082
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Traditional Mutual Fund Dr. Krause, Marquette, FINA 4082
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Pricing and Fees The net asset value (NAV) is the value of the  fund’s assets minus its liabilities, stated on a per- share basis.  The share price of an open-end mutual fund will  always equal the NAV since the firm is obligated to  redeem shares at any time at current market value.  The share price of a closed-end fund  may trade at a  premium or at a discount to the actual NAV since the  share price is determined in the secondary market. Types of fees include load charges, management  fee, administrative fees, and 12b-1 fees  (marketing fees). All of these fees are built into the  NAV of the fund and can significantly affect fund  performance. Dr. Krause, Marquette, FINA 4082
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Various Types of Mutual Fund  Investment Strategies Style:  Focus on underlying investment  characteristics (such as value vs. growth).
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