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Trending: Top Three Emerging Markets Equity Funds
Daniel Cross
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These funds specifically invest in emerging market economies with the largest being China...
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For example, one of the benefits of investing in the stock market is that stocks are highly liquid. It takes only a matter of minutes and a few mouse clicks to buy and sell stocks. As a result, stocks are highly liquid, because an investor can turn their shares into cash very quickly.
The Securities and Exchange Commission has proposed new rules designed to enhance liquidity for investors as it pertains to the mutual fund industry. Here is a rundown of the new rules, and why they matter for investors.
The proposed changes also include language on what is called “swing pricing,” a tactic used to pass on costs of liquidation and redemptions directly to shareholders. This measure is designed to protect existing fund holders from dilution caused by other shareholders’ purchases and redemptions.
Moreover, the proposed rules would require mutual funds to have a liquidity risk management program. There are many key aspects of this program that fund holders should know about. First, open-ended funds would have to classify each position according to its liquidity. Then, they would have to determine a minimum percentage of its assets that must be invested in cash, otherwise in assets that can be converted into cash within three business days. The Board would then be responsible for reviewing the fund to make sure it meets these requirements.
Liquidity is one of the main reasons why exchange traded funds have become increasingly popular in recent years. ETFs give the investor the same benefits of a mutual fund, in that they invest in a basket of securities, but with the added benefit of higher liquidity than traditional mutual funds. As a result, enhancing liquidity for mutual funds could place mutual funds on more even ground with ETFs.
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News
Daniel Cross
|
These funds specifically invest in emerging market economies with the largest being China...
Jayden Sangha
|
In this article, we will take a closer look at the upcoming initiatives...
Kristan Wojnar, RCC™
|
This week we are tackling the practice management topics of a client-centric approach,...
Find out why $30 trillon is invested in mutual funds.
Download our free report
Find out why $30 trillon is invested in mutual funds.
Download our free report
Find out why $30 trillon is invested in mutual funds.
Mutual Fund Education
Justin Kuepper
|
Let's take a closer look at how ESG investments have outperformed during the...
Mutual Fund Education
Daniel Cross
|
While CITs and mutual funds share many similarities, there are some key differences...
Mutual Fund Education
Sam Bourgi
|
The phrase ‘bear market’ has been thrown around a lot lately, but it...
For example, one of the benefits of investing in the stock market is that stocks are highly liquid. It takes only a matter of minutes and a few mouse clicks to buy and sell stocks. As a result, stocks are highly liquid, because an investor can turn their shares into cash very quickly.
The Securities and Exchange Commission has proposed new rules designed to enhance liquidity for investors as it pertains to the mutual fund industry. Here is a rundown of the new rules, and why they matter for investors.
The proposed changes also include language on what is called “swing pricing,” a tactic used to pass on costs of liquidation and redemptions directly to shareholders. This measure is designed to protect existing fund holders from dilution caused by other shareholders’ purchases and redemptions.
Moreover, the proposed rules would require mutual funds to have a liquidity risk management program. There are many key aspects of this program that fund holders should know about. First, open-ended funds would have to classify each position according to its liquidity. Then, they would have to determine a minimum percentage of its assets that must be invested in cash, otherwise in assets that can be converted into cash within three business days. The Board would then be responsible for reviewing the fund to make sure it meets these requirements.
Liquidity is one of the main reasons why exchange traded funds have become increasingly popular in recent years. ETFs give the investor the same benefits of a mutual fund, in that they invest in a basket of securities, but with the added benefit of higher liquidity than traditional mutual funds. As a result, enhancing liquidity for mutual funds could place mutual funds on more even ground with ETFs.
Receive email updates about best performers, news, CE accredited webcasts and more.
News
Daniel Cross
|
These funds specifically invest in emerging market economies with the largest being China...
Jayden Sangha
|
In this article, we will take a closer look at the upcoming initiatives...
Kristan Wojnar, RCC™
|
This week we are tackling the practice management topics of a client-centric approach,...
Find out why $30 trillon is invested in mutual funds.
Download our free report
Find out why $30 trillon is invested in mutual funds.
Download our free report
Find out why $30 trillon is invested in mutual funds.
Mutual Fund Education
Justin Kuepper
|
Let's take a closer look at how ESG investments have outperformed during the...
Mutual Fund Education
Daniel Cross
|
While CITs and mutual funds share many similarities, there are some key differences...
Mutual Fund Education
Sam Bourgi
|
The phrase ‘bear market’ has been thrown around a lot lately, but it...