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Fees

Managing cost

Market impact cost

ETF

Relatively low; however, selling on exchange is subject to fees Low, because, unlike mutual funds, creation and termination is done with in-kind securities and cash and there is low turnover of Fund assets There is market impact cost between quoted market prices of sale/purchase of ETF shares

MF Open ended type Relatively high

Close-ended type

Relatively high, because of high turnover of the securities comprising the portfolio (the underlying securities are sold and bought).

Potential opportunity cost due to the time gap between decision making and execution.

Advantages of ETF

¾ Investment is made on a real-time basis, with no time gap between investment

decision and investment; ¾ Management of risk of decrease of stock price through short selling (i.e.,

selling borrowed ETF shares and giving back afterwards) is possible; ¾ Risk management through diversification is possible because ETF represents

a basket of diverse stocks; ¾ Investor with small amount of fund can invest in the entire stock market; and ¾ Sale and purchase can be made through any securities company.

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