CMFAS M9 Participating Policies & ILPs question: managed portfolio from a managed fund

CMFAS M9Participating Policies & ILPs

What distinguishes a 'managed portfolio' from a 'managed fund'?

A A managed portfolio is one fund whose manager picks the assets; a managed fund holds several funds chosen by the manager
B A managed fund is one fund whose manager picks the assets; a managed portfolio holds several funds and the manager picks which fund(s) to hold
C A managed portfolio guarantees the return of capital at maturity, while a managed fund carries full investment risk
D There is no real difference: both are single funds of equities and bonds, and the two terms are interchangeable

Show the answer and explanation

Answer: B. A managed fund is one fund whose manager picks the assets; a managed portfolio holds several funds and the manager picks which fund(s) to hold

In a managed (balanced) fund there is one fund and one manager choosing the underlying assets. A managed portfolio (also called a risk-rated or lifestyle fund) holds a preset mix of potentially several funds, and the investment manager decides which fund or funds to invest in.

Common mistake

The descriptions are reversed in the swapped-definition option — the managed fund is the single fund of assets.

Practise more M9 Participating Policies & ILPs questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: Participating Policies & ILPs CMFAS M9practice questions & mock exams

Related CMFAS M9 questions

Which statement about an insurer's Internal Governance Policy on participating fund management is correct?In a given year an insurer allocates S$108 million to its participating policy owners as bonus. Under the 90:10 rule, what is the maximum profit the insurer may take from the participating fund for that year?Under a DB4 (higher of units or sum assured) ILP, the sum assured is S$100,000, the value of units is S$40,000, and the annual cost of life cover is S$3.00 per S$1,000. What is the monthly mortality charge?

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public CMFAS M9 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.