Packaged products — mutual funds, ETFs, UITs, annuities
**Open-end mutual funds (Investment Company Act of 1940):** • Sold/redeemed at next-computed NAV (forward pricing, Rule 22c-1). • Classes: A (front-end load, breakpoints, LOI/ROA), B (back-end CDSC that declines; most issuers have phased these out), C (level load, 1% 12b-1). • Fees: expense ratio = mgmt + 12b-1 + other. 12b-1 capped at 0.75% distribution + 0.25% service under FINRA 2341.
**ETFs** — intraday-traded, typically index-tracking, create/redeem in-kind by Authorized Participants. Tax-efficient relative to mutual funds due to in-kind redemptions.
**UITs** — fixed portfolio, no active management, defined termination date.
**Annuities:** • **Fixed annuity** — insurance product, not a security. • **Variable annuity** — sub-accounts in separate account, treated as a security (requires '33 Act registration and Series 6/7 + state insurance license). Death benefit, annuitization options, surrender charges, mortality & expense (M&E) fees. • **Indexed annuity** — tied to an index; most states classify as non-security insurance, but SEC Rule 151A history is complex.
**REITs** — equity REITs (own property), mortgage REITs (hold mortgages), hybrid. Must distribute ≥90% of taxable income to retain RIC pass-through status.
**DPPs (limited partnerships)** — pass-through tax, illiquid, suitable only for specific investors; subject to FINRA Rule 2310 suitability and disclosure.