• Define a mutual fund.
• Identify that mutual funds require a securities license in order for an individual to act in furtherance of a trade.
• Identify which organization(s) provide regulatory oversight for mutual funds.
• Explain how each of the factors may impact the suitability of a mutual fund, such as:
  • Time horizon
  • Volatility
  • Risk tolerance
  • Investment objective
  • Financial situation
  • Personal situation
  • Income
  • Liquidity
  • Control
  • Tax impact
  • Investment management process
  • Economic cycle
  • Cost
  • Historical performance
  • Performance expectations
  • Personal attitudes
• Evaluate how each of the factors may impact the suitability of a mutual fund.
• Explain for whom a mutual fund may be suitable.
• Explain the structure that a mutual fund may have.
  • Trust
  • Corporation
• Explain the role of those involved with operating a mutual fund, such as:
  • Fund manager
  • Custodian
  • Auditor
• Compare open-end and closed-end funds, specifically:
  • Liquidity
  • Trading process
  • Transparency
  • Variability of structure
  • Cost
• Explain the different classes of mutual funds that may be available.
• Explain how the corporate class structure of a mutual fund affects its tax treatment.
  • When income is received from the fund
  • When the fund is disposed of
• Explain the information contained in a Fund Facts for a mutual fund.
• Explain with whom a mutual fund is traded (i.e. purchased from and redeemed to).
• Explain the types of mutual funds available, as classed by the Canadian Investment Funds Standards Committee (CIFSC).
  • Money market
  • Fixed income
  • Balanced
  • Equity
  • Specialty
  • Target-date
• Compare active and passive management.
• Explain rights available to mutual fund holders, such as:
  • Right of redemption for open ended funds
  • Right of rescission
  • Voters' rights
• Explain types of sales charges that may be charged on a mutual fund, such as:
  • No load
  • Low load
  • Front-end
  • Back-end or deferred sales charge
• Explain fees associated with mutual funds, such as:
  • Trailer fee
  • Management fee
  • Management expense ratio
  • Trading expense ratio
  • Early redemption/short-term trading fee
  • Switching fees
• Define the Net Asset Value Per Share (NAVPS) for a mutual fund.
• Explain how a mutual fund is priced using the Net Asset Value Per Share (NAVPS).
• Interpret the Net Asset Value Per Share (NAVPS) for a mutual fund.
• Explain types of income that may be distributed by a mutual fund, such as:
  • Interest
  • Dividends
  • Capital gains
• Explain the preservation of character that exists when income received by a mutual fund is distributed to unitholders of the mutual fund.
• Explain the impact of a distribution from a mutual fund on the net asset value per share (NAVPS).
• Explain the impact of reinvested distributions from a mutual fund on adjusted cost basis.
• Interpret the return for a mutual fund.
• Explain the tax impact (based on asset location) of a mutual fund.
  • When distributions are received due to trading activity in the pool of investments
  • Upon disposition of the mutual fund
• Estimate the tax impact (based on asset location) of a mutual fund.
  • When distributions are received due to trading activity in the pool of investments
  • Upon disposition of the mutual fund
• Explain how a return of capital distribution defers a tax liability.
• Explain that the return of a mutual fund is presented after the fund expenses have been deducted from the gross return of the fund.

Mutual Fund Comparisons

• Compare mutual funds and pooled funds, specifically:  
  • Regulatory oversight
    • Organization(s) that regulate distribution
    • Licensing requirements for individuals who sell the funds
    • Main disclosure documents required for purchase
    • Minimum valuation periods
  • Permissible issuers of each type of fund
  • Ownership and segregation of assets
  • Relative risk
  • Relative costs
  • Permissible use of derivatives
  • Allowance to take concentrated positions
  • Redemption rights / restrictions
  • Protection against insurer insolvency
• Compare mutual funds and exchange traded funds, specifically:  
  • Regulatory oversight
    • Organization(s) that regulate distribution
    • Licensing requirements for individuals who sell the funds
    • Main disclosure documents required for purchase
    • Minimum valuation periods
  • Permissible issuers of each type of fund
  • Ownership and segregation of assets
  • Relative risk
  • Relative costs
  • Permissible use of derivatives
  • Allowance to take concentrated positions
  • Redemption rights / restrictions
  • Protection against insurer insolvency
• Compare mutual funds and segregated funds, specifically:
  • Regulatory oversight
    • Organization(s) that regulate distribution
    • Licensing requirements for individuals who sell the funds
    • Main disclosure documents required for purchase
    • Minimum valuation periods
  • Permissible issuers of each type of fund
  • Ownership and segregation of assets
  • Relative risk
  • Relative costs
  • Permissible use of derivatives
  • Allowance to take concentrated positions
  • Redemption rights / restrictions
  • Protection against insurer insolvency
• Compare mutual funds and hedge funds, specifically:
  • Level of regulatory oversight
  • Main disclosure documents for purchase
  • Permissible uses of derivatives
  • Permissible uses of short positions
  • Liquidity
• Compare exchange traded funds and index mutual funds.