Funds and ETFs

What’s inside

• What is the main feature that distinguishes an ETF from a traditional open-end mutual fund?
• What does a fund's expense ratio primarily measure?
• An ETF's market price can temporarily trade above or below its net asset value.
• What is the primary purpose of the creation and redemption mechanism in an ETF?
• An index fund must always hold every security in its benchmark in exactly the same proportion.
• What is tracking error?
• Which statement best describes an actively managed fund?
• A lower expense ratio guarantees that one fund will outperform another fund with a higher expense ratio.