Investment fund basics · Question 2 of 12
What happens to the fund's assets if the asset management company becomes insolvent?
1 answer is correct. Easy
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Answer
- A It is protected as separate assets and is not part of the insolvency estate
Explanation
The fund's assets are held separately from the company's assets and kept in custody by a depositary. If the company becomes insolvent, they continue to belong to the investors. This does not protect against price losses on the investments.