Purchase Fund

Purchase Fund This type of fund can only be used when the issuers are purchasing securities that are below the dollar amount that they had originally been assigned. Basically, the issuer is required to purchase a predetermined number of shares is the price of the share drops below a certain monetary value for a specified price. This is meant to protect investors from their shares falling too low because the company has to give the investor the predetermined amount to repurchase the share. A purchase fund is beneficial to the investor and can cause the company problems if their shares drop too far in price for the investor's liking.