Skip to content

NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles

An Exchange Traded Fund (ETF) tracking an index differs from a regular open-ended index fund mainly because the ETF:

An ETF is listed on a stock exchange, so investors buy and sell its units at prevailing market prices during trading hours through a demat account. A regular index fund, by contrast, is transacted with the AMC at the end-of-day NAV.

  1. ACannot track any index
  2. BIs traded on a stock exchange at market prices through a demat account during market hoursCorrect
  3. CIs always actively managed with no benchmark
  4. DIs redeemed only once a year by the investor directly

Explanation

ETF units are listed and traded on exchanges at market prices during trading hours, needing a demat account. Large blocks are created and redeemed by authorised participants. Index funds are bought and redeemed with the AMC at end-of-day NAV.

Did you get it right without looking?

One question tells you little. A timed set on Collective Investment Vehicles shows your real accuracy, how long you take and where you lose marks.

Practise Collective Investment VehiclesFree diagnostic mock

More Collective Investment Vehicles questions