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Title:

MUTUAL FUNDS

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Auto-pay from bank account. Automatic re-investment plans. Minimum requirements for investing ... Rental and lease cash flows pay off loans ... – PowerPoint PPT presentation

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Title: MUTUAL FUNDS


1
MUTUAL FUNDS
2
SERVICES PROVIDED
  • risk intermediation
  • denomination intermediation
  • marketability
  • economies of scale in investment management
  • low transaction costs
  • continuous cash flow

3
TYPES
  • Open end
  • Closed end
  • Investment Trust
  • Load or No-Load

Shares certificate
Shares certificate
4
FUND CATEGORY
  • Aggressive Growth
  • Global Equity
  • Growth and Income
  • Growth
  • Income-Equity
  • International
  • Precious Metals/Gold
  • Taxable Money Market
  • Tax-Exempt Money Market--National
  • Tax-Exempt Money Market--State
  • Corporate Bond
  • Ginnie Mae
  • Global Bond
  • High-Yield Bond
  • Income-Bond
  • National Muni Bond
  • State Muni Bond
  • U.S. Government Income
  • Balanced
  • Flexible Portfolio
  • Income-Mixed

5
STRUCTURE
  • Ownership by shareholders--mutual
  • Board and Management
  • Investment Advisor
  • Management Fees
  • Operating Expenses
  • Custodian, Transfer Agent
  • Principal Underwriter

6
REGULATION TAXATION
  • Securities Act of 1933
  • Securities Exchange Act of 1934
  • Investment Company Act of 1940
  • SEC rule 12b-1
  • DIDMCA of 1980
  • Insider Trading and Securities Act of 1988
  • Market Reform Act of 1990
  • Subchapter M
  • Conduit theory

7
PROSPECTUS
8
INVESTING IN A MUTUAL FUND
  • Buy direct from fund
  • Broker
  • Payroll deduction
  • Auto-pay from bank account
  • Automatic re-investment plans
  • Minimum requirements for investing

9
INVESTING IN A MUTUAL FUND, cont.
  • Withdrawals
  • Receive interest, dividends, capital gains
  • Write check against balance
  • Sell shares back
  • Switch funds

10
INSTITUTIONAL INVESTORS
  • Over 40 of owned shares
  • Fiduciaries--banks, trustees, guardians, estate
    administrators
  • Banks-MMMF
  • Others--other types
  • Business Organizations
  • Not-for-Profit Organizations

11
MMMFs
  • Transactional convenience
  • Competition with banking

12
REITs
Equity Trust Short-Term Mortgage Trust Long-Term
Mortgage Trust
13
EQUITY TRUST
  • Fund owns property with a
    mortgage
  • Rental and lease cash flows pay off loans
  • Reduction of debt and value increase produce
    INCREASE IN EQUITY for investor
  • Depreciation TAX DEDUCTION

14
REIT Profits and Cash Flows
15
SHORT-TERM MORTGAGE TRUST
  • Construction and development loans
  • Leverage used
  • Income to owners is based on different between
    the cost of funds and the return on
    loans granted

16
LONG-TERM MORTGAGE TRUST
  • Trust borrows money
  • Long-term mortgages granted
  • Small earnings from difference between borrowing
    and lending rates
  • Most of the benefits come from Shared
    Appreciation deals
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