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Canada (161,400)
RSM230H1 (34)
Chapter 22

CSC_Chapter 22 Exchange-Listed Managed Products.pdf

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Department
Rotman Commerce
Course
RSM230H1
Professor
Laurence Booth
Semester
Summer

Description
Chapter 22: Exchange-Listed Managed Products December-13-11 2:08 AM Exchange-Traded Funds (ETFs) • Diversified;Reflect the performanceof differentsectors • Trade on a stock exchange like stocks:Margineligible/limit & stop loss/ short selling • Trade at close to NAV: (large blocks of shares continuallycreated and sold as demandvaries • Mutualfunds pricedonce daily • ETFholdings posted daily: full knowledgeof the underlying; mutualfunds usuallytwice a year. • Financial advantages  Fewer distributions(tax)  Don't need to hold cash for redemptions.  No front-end load/deferred sales charges (XIU 0.17%)  Generallylower managementexpenseratios (XIU 0.17%)  Source:TSX ○ Investmentvehicles that combine some of the featuresof mutualfunds and individualstocks ○ Structuredas open-endedmutualfund trusts and are similar to index mutualfunds becausethey representa portfolioof securities that track specific market indexes ○ Tradedthroughout the day, can employstock tradingstrategies such as derivatives and shortselling ○ Trading ETFs  Long-termgrowth (buy and hold)  Short-term growth (buy and sell) for short-term forecasts of a particu
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