Worksheetsopen-ended investment companies
Total questions: 10
Worksheet time: 5mins
What is the main difference between unit trusts and open-ended investment companies (OEICs)?
Unit trusts have fixed prices per unit, while OEICs have fluctuating prices based on the fund's assets.
Unit trusts are only available in the United Kingdom, while OEICs are global investments.
Unit trusts are established under a trust deed, while OEICs are structured as investment funds.
Unit trusts are regulated by the Securities Commission Malaysia, while OEICs are regulated by the Financial Conduct Authority in the UK.
What is the role of a trustee in a unit trust?
To set the bid and offer prices for units.
To market and distribute the fund to investors.
To ensure compliance with the trust deed and prospectus.
To manage the assets of the fund for profit.
What is the purpose of the bid-offer spread in unit trusts?
To indicate the risk profile of the fund.
To show the difference between the buying and selling price of units.
To determine the total expense ratio of the fund.
To calculate the annual management charge.
Which regulatory body is responsible for authorizing unit trust funds in Malaysia?
Bank Negara Malaysia
Securities Commission Malaysia
Financial Conduct Authority
Malaysian Investment Development Authority
What is the main advantage of investing in OEICs?
Diversified portfolios
High exit charges
High annual fees
Low liquidity
What is the main difference in pricing between unit trusts and OEICs?
Unit trusts have a single price based on net asset value, while OEICs have bid and offer prices.
Unit trusts have fluctuating prices, while OEICs have fixed prices.
Unit trusts have lower fees than OEICs due to their complex structure.
Unit trusts have front end loads, while OEICs have exit charges.
What is the purpose of the annual management charge (AMC) in OEICs?
To set the exit charges for investors
To determine the bid price of units
To calculate the total expense ratio
To cover the fund manager's services
Why are OEICs considered useful for investors who do not actively manage their investments?
They provide professional money management
They offer low liquidity
They require a short-term investment horizon
They have high exit charges
What is the eligibility requirement for a management company to establish a unit trust fund in Malaysia?
Must maintain a minimum of 30% Bumiputera equity
Must appoint at least 2 independent directors
Must have a minimum shareholders' fund of RM10 million
Must have more than 50% foreign equity
What should investors be cautious about when considering unauthorized funds?
The lack of regulation and safeguards
The low risk associated with the fund
The diversification of the fund
The high liquidity of the fund
