NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
An Exchange Traded Fund (ETF) tracking the Nifty 50 differs from an actively managed diversified equity fund mainly because the ETF:
An index ETF passively replicates the benchmark and is bought and sold on the stock exchange at market prices via a demat account. It does not aim to beat the index and does not guarantee returns, since tracking error and expenses remain.
- AAims to replicate the index and is traded on the stock exchange at market prices through a demat accountCorrect
- BTries to beat the index by taking concentrated stock bets
- CCan be bought only at the end-of-day NAV from the fund house by retail investors
- DGuarantees returns equal to the Nifty 50
Explanation
An index ETF passively replicates its benchmark and trades on exchanges at market prices, so a demat and trading account is used. It does not try to outperform, and returns are not guaranteed because tracking error and expenses exist.
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.
More Collective Investment Vehicles questions
- Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in India are regulated by which authority?
- Which of the following best describes a Real Estate Investment Trust (REIT) in the Indian context?
- A real estate investment trust (REIT) in India primarily generates returns for unitholders through:
- Which statement about Infrastructure Investment Trusts (InvITs) in India is correct?
- Under SEBI regulations, a Category III Alternative Investment Fund is best described as one that:
- Which statement about an Exchange Traded Fund (ETF) is correct?