NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
Which feature distinguishes an Exchange Traded Fund (ETF) from a conventional open-ended index mutual fund scheme?
An ETF is traded on a stock exchange during market hours at market prices, unlike a conventional index fund that deals at the end-of-day NAV with the AMC. ETFs generally track an index and are held in demat form.
- AETF units are bought and sold on a stock exchange at market prices during trading hoursCorrect
- BETFs never track any index
- CETF units can be bought only directly from the AMC at the end-of-day NAV
- DETFs cannot be held in a demat account
Explanation
ETF units trade on exchanges throughout the day at market prices, which stay close to NAV through the creation and redemption mechanism by authorised participants. Most ETFs track an index and are held in demat form. Purchase only at end-of-day NAV from the AMC describes a conventional fund.
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
- A Category III Alternative Investment Fund (AIF) is described by SEBI as one that employs diverse or complex trading strategies and may use …
- Under the SEBI Alternative Investment Funds Regulations, which category of AIF is described as funds that invest in start-ups, early-stage v…
- Which category of AIF is generally permitted to employ leverage and invests in listed or unlisted derivatives, such as hedge funds?
- A Category III Alternative Investment Fund (AIF) is best described as one that:
- Which of the following is a key characteristic of an Infrastructure Investment Trust (InvIT)?
- Which of the following best describes a feature of an open-ended mutual fund scheme in India?