C
cjno1
Member
Hi,
There's a couple of points I was struggling to understand in chapter 4 about ETFs:
Page 48 Section 8.2
"Exchange Traded Funds (ETFs) are the ‘closed-ended’ investment trust
equivalents of (mutual) Index Funds . . . .
So, ETFs combine:
• the open-endedness of a unit trust or investment trust with . . . "
How can they have the open-endedness of a UT or IT if they are closed-ended?
Page 50 Section "Differences between ETFs and mutual funds"
"ETFs are exchange-traded so trading incurs greater
transaction costs."
I thought that if something was traded on an exchange it would have lower transaction costs than bespoke OTC contracts?
Thanks!
There's a couple of points I was struggling to understand in chapter 4 about ETFs:
Page 48 Section 8.2
"Exchange Traded Funds (ETFs) are the ‘closed-ended’ investment trust
equivalents of (mutual) Index Funds . . . .
So, ETFs combine:
• the open-endedness of a unit trust or investment trust with . . . "
How can they have the open-endedness of a UT or IT if they are closed-ended?
Page 50 Section "Differences between ETFs and mutual funds"
"ETFs are exchange-traded so trading incurs greater
transaction costs."
I thought that if something was traded on an exchange it would have lower transaction costs than bespoke OTC contracts?
Thanks!