CMFAS M8 Structure & Parties to a Fund question: trustee's duty to hold the manager to account

CMFAS M8Structure & Parties to a Fund

The trustee's duty to 'hold the manager to account' primarily serves to:

A protect the interests of the unitholders
B increase the manager's annual management fee
C guarantee that the fund achieves positive returns
D transfer day-to-day investment decisions to the trustee

Show the answer and explanation

Answer: A. protect the interests of the unitholders

Holding the manager to account is part of the trustee's core duty to act in the best interests of, and safeguard, the unitholders; it does not make the trustee the investment decision-maker or a guarantor.

Common mistake

Reading accountability as the trustee taking over investment decisions or guaranteeing returns, rather than protecting unitholders.

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CMFAS M8 Structure & Parties to a Fund question: trustee's duty to hold the manager to account

Answer: A. protect the interests of the unitholders

Common mistake

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CMFAS M8 Structure & Parties to a Fund question: trustee's duty to hold the manager to account

Answer: A. protect the interests of the unitholders

Common mistake

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