CCM Unit Trust key terms

A pooled investment arrangement in which multiple investors contribute money that is managed as a single portfolio by a professional manager, with investors receiving units or shares in proportion to their contribution.

A CIS structured as a trust in which investor money buys units of a pooled portfolio; the assets are held by an independent trustee and managed by a fund management company for unit holders.

A person or entity that owns units in a unit trust, giving them a beneficial interest in the fund's assets and the right to share in income and capital gains distributed by the scheme.

An independent institution that holds legal title to a unit trust's assets on behalf of unit holders, safeguards the assets, monitors the manager and ensures the fund operates according to its deed and regulations.

The licensed company responsible for making investment decisions for a unit trust, selecting and trading the portfolio's assets within the fund's stated objectives, strategy and regulatory limits.

The legal document that establishes a unit trust and sets out its objectives, investment powers, fees, distribution policy, unit holder rights and the duties of the manager and trustee.

A regulated disclosure document that describes a fund's investment objective, strategy, risks, fees, service providers and subscription details, enabling investors to make an informed investment decision before buying units.

A short, standardized summary document that presents the key features, risks, costs and performance of a unit trust in plain language, intended to help retail investors compare products quickly.

The statutory regulator that oversees capital markets, including unit trust schemes, by licensing fund managers and advisers, approving prospectuses and enforcing securities laws and conduct standards.

The regulatory process by which a firm or individual obtains formal authorization to conduct regulated activities such as fund management, dealing in securities, advising or marketing unit trusts.

A regulatory test assessing whether a person has the honesty, integrity, competence, financial soundness and reputation suitable for a licensed role, considering past misconduct, insolvency and criminal records.

The total value of a fund's assets minus its liabilities, usually expressed per unit; it is the price at which units are created or redeemed and is calculated at each valuation point.

The cut-off time, usually once daily, at which a fund's assets are valued and the NAV per unit is struck, determining the price applied to subscriptions and redemptions received by that time.

A pricing method where subscription and redemption orders are processed at the NAV per unit calculated at the next valuation point after the order is received, rather than at a known past price.

The deadline by which an investor's subscription or redemption instruction must be received to be processed at that day's valuation point; later orders roll to the following dealing day.

The act of an investor buying units in a unit trust by paying the applicable offer price plus any initial sales charge, after which the investor becomes a unit holder in the fund.

The process by which a unit holder sells units back to the fund manager and receives the redemption price, usually the NAV per unit less any redemption charge, within the stated settlement period.

Moving an investment from one fund to another within the same fund management company, typically at a reduced or waived sales charge and subject to the destination fund's eligibility rules.

A one-off fee charged when units are purchased, usually calculated as a percentage of the investment amount, which reduces the amount actually invested and is disclosed in the prospectus.

An ongoing fee charged by the fund manager for managing the portfolio, typically a percentage of the fund's NAV accrued daily and reflected in the unit price rather than invoiced to investors directly.

A measure of a fund's total ongoing costs, including management, trustee and administrative fees, expressed as a percentage of average net assets over a stated period.

A payment of income or realized gains from a fund to unit holders, either as cash or reinvested as additional units, according to the distribution policy stated in the trust deed.

A restructuring in which existing units are subdivided into a larger number of units, reducing the NAV per unit proportionally while leaving the investor's total value and proportionate ownership unchanged.

A statutory or contractual window after a purchase during which a retail investor may cancel the investment and obtain a refund of the subscription amount, subject to market movement adjustments.

The requirement to explain clearly, in prospectuses and marketing materials, the material risks of a fund, including market, credit, liquidity, currency and concentration risks, so investors understand potential losses.

The process of evaluating an investor's financial situation, investment experience, objectives, time horizon and risk tolerance to determine whether a particular fund is appropriate for them.

The due diligence process of collecting and verifying information about a client's identity, financial profile and investment objectives before providing advice or accepting an investment instruction.

An investor's capacity and willingness to accept fluctuations in the value of an investment in pursuit of returns, shaped by financial resources, goals, experience and emotional response to losses.

The framework of laws, policies and procedures requiring financial institutions to identify customers, monitor transactions, keep records and report suspicious activity to prevent proceeds of crime entering the system.

A confidential report filed with the financial intelligence unit when a firm detects activity that may indicate money laundering or other financial crime, without informing the customer of the filing.

An individual licensed or registered to act on behalf of a fund management company or distributor, including marketing units, advising clients and handling applications, under the principal's supervision.

Any advertisement, brochure, presentation or online content promoting a unit trust, which must be fair, balanced, not misleading and consistent with the prospectus, with performance claims properly sourced.

Historical returns of a fund shown in marketing material; they must be presented accurately with the period stated and accompanied by a warning that past performance does not guarantee future results.

A reference index or measure against which a fund's performance and risk are compared, helping investors judge whether the manager has added value relative to the stated investment universe.

A situation where a person's or firm's own interests, or duties to another party, could improperly influence decisions made on behalf of a client, requiring disclosure, avoidance or management.

The legal obligation to act in the best interests of another party, placing the client's interests ahead of one's own and requiring loyalty, prudence, confidentiality and full disclosure of relevant information.

A set of professional standards governing honesty, integrity, competence, confidentiality and fair dealing that licensed persons must observe in their dealings with clients, employers and regulators.

A benefit, commission or non-monetary incentive offered to a distributor or representative that may influence the advice given, which must be disclosed or prohibited depending on its nature.

An ongoing commission paid by the fund manager to a distributor out of the management fee for as long as the investor remains in the fund, rewarding continued distribution and servicing of the client.

Trading or tipping others to trade in securities while in possession of material non-public information, an offence that undermines market fairness and is prohibited by securities legislation.