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MF Structure & Regulation - Coggle Diagram

- - - - reinvestment options = automatic reinvestment to buy more units
      - flexible purchase/withdrawal = can invest lumpsum or monthly (pre auth contribution)
      - regulatory filing = file reports & disclosure docs under SEDAR (system for electronic document analysis and retreival -- stores all docs from all MF, PE, eq funds; everything from fund facts doc, annual reports, prospectus, management reports)
      - record keeping = track cost base and taxable income
- - - - taxation = fund doesnt pay taxes, distributes to unitholders who then pay taxes (aka pass-through taxation)
      - ownership = investors own units of fund
      - trustees appointed to manage the fund on behalf of investors
      - contracts = trustees can enter contracts with managers
      - trust deed = legal doc establishes objcs, rules, legal regulations; similar to fund facts doc
      - redemptions = redeemed on bus day at current NAVPS
      - voting rights = may or may not have voting rights depending on whats in the trust deed
  - - - taxes = pays taxes first, distributes in later and gets tax refunds on distribution (so not taxed again)
      - ownership = investors own shares not units
      - directors = board of directors appointed to run the fund
      - req under income tax act = must meet 2 criteria (1. must be in diversified portfolio; 2. income must come primarily from investment returns not bus ops)
- - - - no load fund = no sales commission when buying or selling; still pay management fee every yr 'think like no entry ticket but pay monthly rent'
      - front end load = upfront commission when you buy; % of amount invested; front end load - NAVPS/(1-front end load%); eg - navps is 15, front end load is 3%, 15/(1-0.03)=15/0.97=15.46, investor pays $15.46 per unit
      - back end load = pay when you sell the fund; encourage long term investing; banned in CAN since june 1 2022 but older funds might still have it
    - - fund pays fund manager to make decisions; charged yearly; 0.5-3% of assets; actively managed is higher fee; passive index funds lower fee
    - - management expense ratio (MER) = (annual total of all fees and expenses excluding trading costs)/average net assets
      - trading expense ratio = total trading costs/total assets x100; measures how often the fund buys or sells; high TER - lots of trading; low TER - buy and hold approach
      - trailer fee (service fee) - paid by fund company to advisors for ongoing services to cx; encourages advisors to check in regularly with clients
      - f class funds (fee based acc) = cx pays flat annual fee (like a % of total pf), aligns advisor's interest with cx's ; transparent cost, no per transaction commission; can cause double charging so management fee on the fund itself is reduced to avoid duplication