CMFAS Collective Investment Schemes M3 6

Question 1

What is the difference between accumulation and distribution classes of a fund?

Accepted Answer

Accumulation reinvests income; distribution pays income to investors

Answer

Accumulation classes reinvest any income (dividends/interest) back into the fund, increasing NAV. Distribution classes pay income directly to investors.

Question 2

What is a sustainable/ESG fund?

Accepted Answer

A fund that considers environmental, social, and governance factors in its investment process

Answer

ESG funds integrate environmental, social, and governance criteria into their investment analysis and decision-making process.

Question 3

What is the total return of a fund?

Accepted Answer

The combined return from capital gains and income distributions

Answer

Total return includes both capital appreciation (increase in NAV) and any income distributions (dividends, interest) received by investors.

Question 4

What is a multi-asset fund?

Accepted Answer

A fund that invests across multiple asset classes such as equities, bonds, and alternatives

Answer

A multi-asset fund invests across various asset classes to achieve diversification and manage risk through a balanced approach.

Question 5

What is the role of an auditor in a CIS?

Accepted Answer

To independently verify the fund's financial statements and operations

Answer

An auditor independently examines and verifies the fund's financial statements, ensuring accuracy and compliance with accounting standards.

CMFAS Practice Test

CMFAS Practice Test

CMFAS Collective Investment Schemes M3 6