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ETFs and Mutual Funds

ETFs and Mutual Funds. An ETF (Exchange-Traded Fund) is. A company traded on an exchange A mutual fund that can be bought direct from the mutual fund company Similar to a mutual fund that trades like a stock. ETFs are appealing because they. Have relatively low fees Are rarely traded

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ETFs and Mutual Funds

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  1. ETFs and Mutual Funds

  2. An ETF (Exchange-Traded Fund) is • A company traded on an exchange • A mutual fund that can be bought direct from the mutual fund company • Similar to a mutual fund that trades like a stock

  3. ETFs are appealing because they • Have relatively low fees • Are rarely traded • Contain one stock per ETF • Only invest in stocks

  4. One advantage of an ETF vs. a Mutual Fund is • ETFs can be bought throughout the trading day while mutual funds can only be purchased once a day • ETFs are more likely to increase in value vs. a mutual fund • ETFs are less volatile than a mutual fund • ETFs can invest in more securities than a mutual fund

  5. ETFs are _____ tax-efficient due to ___________ • Less heavy trading • Less management fees • More infrequent trading • More less profits

  6. A load mutual fund is a mutual fund that • is “loaded up” with few stocks • charges a sales charge when purchased • Is “loaded up” with many stocks • a mutual fund that invests in municipal load investments

  7. Index funds primary advantage over actively managed funds is • The tracking of an index • The lower operating expenses • The lower volatility • The narrower number of stocks or bonds

  8. Differences between ETFs and managed mutual funds • ETFs trade on exchanges • ETFs can be bought throughout the day • ETF expenses are lower • ETFs are more tax efficient • ETFS have less turnover • All of the above • None of the above

  9. Differences between ETFs and managed mutual funds • ETFS trade on exchanges • Bonds, lending • Bonds, stocks • Stocks, bonds

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