Investment Companies and ETFs: Rapid Fire

What this video covers

• The three investment company types under the 1940 Act: face-amount certificate companies, unit investment trusts (UITs), and management companies, and why UITs issue units not shares with a fixed portfolio and termination date
• The 75-5-10 diversification test for management companies, and the exam distinction between diversified and non-diversified funds
• Open-end fund forward pricing at net asset value (NAV) versus closed-end fund trading at market price, including premium, discount, and borrowing rules with 300% debt and 200% preferred stock coverage
• Why sales charges are always calculated as a percentage of public offering price (POP), never NAV, and the back-solve formula: POP = NAV / (1 - sales charge %)
• Class A, B, and C share characteristics: front-end breakpoints, contingent deferred sales charge (CDSC) conversion, and level-load suitability for time horizons
• The 8.5% maximum front-end load, 12b-1 fee caps, 7-calendar-day redemption rule, and why exchanges within a fund family remain taxable events
• ETF in-kind creation and redemption versus mutual fund pass-through taxation, and why exchange-traded notes (ETNs) carry issuer credit risk as unsecured bank debt