What would happen to my investment in a fund if the managing bank collapsed?
Based on advice in a book I've been reading (Investing Demystified), I've put a lot of my money in an 'all world' index fund, managed by HSBC. This is based on the premise that an all world fund is well diversified, with low management costs.
I want to understand if there is any risk of the fund collapsing if the bank collapsed. Would I still own anything in that event and are there any events which might occur that would cause me to lose all of my investment?
With shares, my understanding is that I own part of the company so while a bank may facilitate the trade, once the trade is made, I have ownership. But in the case of an index fund I'm thinking that I may still be dependent on the managing bank. Is this correct?
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