View all questions & answers for the ICWIM exam
Which of the following types of funds is able to cancel units?
Investment trust
Split capital trust
Open-ended
Closed-ended
An open-ended fund can create or cancel units based on investor demand.
Liquidity: Open-ended funds, such as Unit Trusts and OEICs (Open-Ended Investment Companies), continuously issue and redeem shares.
Pricing: The price is based on the Net Asset Value (NAV).
Flexibility: The fund manager can adjust the fund size by issuing or cancelling units.
???? Reference: FCA Handbook, CISI Wealth & Investment Management (Fund Structures).
Submit