RSM230H1 Chapter Notes - Chapter 22: Tax Efficiency
Document Summary
Trade on a stock exchange like stocks: margin eligible/limit & stop loss/ short selling. Trade at close to nav: (large blocks of shares continually created and sold as demand varies. Etf holdings posted daily: full knowledge of the underlying; mutual funds usually twice a year. Investment vehicles that combine some of the features of mutual funds and individual stocks. Structured as open-ended mutual fund trusts and are similar to index mutual funds because they represent a portfolio of securities that track specific market indexes. Traded throughout the day, can employ stock trading strategies such as derivatives and short selling. Short-term growth (buy and sell) for short-term forecasts of a particular index. Attractive because they offer instant diversification and low mers. Minimize capital gains distributions through lower portfolio turnover compare to actively managed mutual funds (more tax efficient) Close to net asset value at any time during the day.
