Pooled Products

Pooled Products: Mutual Funds, ETFs, Closed-End Funds & UITs Pooled products appear on roughly 5–8 questions within Section II (Investment Vehicle Characteristics, 25% of the exam), and the exam consistently tests your ability to distinguish between vehicle structures—especially how they are priced, traded, and taxed—rather than asking you to memorize isolated definitions. --- ## What Are Pooled Products? A pooled product is any investment vehicle that aggregates capital from multiple investors to purchase a portfolio of securities. The key advantage is instant diversification; the key exam task is knowing how each structure works differently from the others. The four main pooled products tested on the Series 65 are: 1. Mutual Funds (open-end funds) 2. Exchange-Traded Funds (ETFs) 3. Closed-End Funds 4. Unit Investment Trusts (UITs) --- ## Mutual Funds (Open-End Funds) A mutual fund continuously issues and redeems shares directly with investors. There is no secondary market trading. ### NAV and Pricing - Net Asset Value (NAV) = (Total Assets − Total Liabilities) ÷ Total Shares Outstanding - Mutual funds use forward pricing: the price you receive is the NAV calculated *after* your order is received, not the price at the moment you click "buy." This is a critical exam concept. - NAV is calculated once per day, after the close of the NYSE (4:00 PM ET). ### Share Classes | Class | Front-End Load | Back-End Load | 12b-1 Fee | |-------|---------------|---------------|-----------| | A | Yes (upfront) | No | Low | | B | No | Yes (declining CDSC) | Higher | | C | No | Small/none | Highest | - 12b-1 fees are annual marketing/distribution fees charged *within* the expense ratio. They reduce NAV continuously…