Podcast
Questions and Answers
Match each phrase with the investment vehicle it best describes:
Match each phrase with the investment vehicle it best describes:
Actively managed by a fund manager. = Mutual Fund Trades like a stock during the day. = ETF May have higher expense ratios due to active management. = Mutual Fund Generally aims to track a specific index. = ETF
Match each characteristic with the type of investment account it is most closely associated with:
Match each characteristic with the type of investment account it is most closely associated with:
Chosen based on the investor's anticipated retirement year. = Target Date Fund May invest in low-cost index funds and ETFs. = Robo-Advisor Offers professional management with personalized financial advice. = Traditional Advisor Suitable for investors seeking a hands-off, automated approach. = Robo-Advisor
Match each definition with the corresponding term:
Match each definition with the corresponding term:
Investment vehicle that pools money from many investors to purchase a diversified portfolio. = Mutual Fund Investment Vehicle that represents a basket of stocks that trade on exchanges. = ETF A professional or company that provides financial advice to clients for a fee. = Traditional Advisor A service that uses algorithms to manage investment portfolios automatically. = Robo-Advisor
Match each description with the type of fund to which it best applies:
Match each description with the type of fund to which it best applies:
Match the investment strategy with the investor profile most likely to use it:
Match the investment strategy with the investor profile most likely to use it:
Match each key feature with the investment account it best describes:
Match each key feature with the investment account it best describes:
Match potential advantages with the appropriate investment type:
Match potential advantages with the appropriate investment type:
Match each investment style with its likely level of human involvement:
Match each investment style with its likely level of human involvement:
Match each expense consideration with its likely investment type:
Match each expense consideration with its likely investment type:
Match each objective with the appropriate investment type:
Match each objective with the appropriate investment type:
Flashcards
What is an Exchange-Traded Fund (ETF)?
What is an Exchange-Traded Fund (ETF)?
Pools investments but has key differences from mutual funds.
What is the main goal of an ETF that tracks a specific index?
What is the main goal of an ETF that tracks a specific index?
Aims to approximate the returns of a market index for investors.
How do investors trade ETF shares?
How do investors trade ETF shares?
They buy/sell shares directly among themselves, like any stock.
What is a key characteristic of both Mutual Funds and ETFs?
What is a key characteristic of both Mutual Funds and ETFs?
Signup and view all the flashcards
What is a Target Date Fund (TDF)?
What is a Target Date Fund (TDF)?
Signup and view all the flashcards
What influences your TDF choice?
What influences your TDF choice?
Signup and view all the flashcards
Why are TDFs a good intro investment?
Why are TDFs a good intro investment?
Signup and view all the flashcards
How do 2030 and 2060 TDFs differ?
How do 2030 and 2060 TDFs differ?
Signup and view all the flashcards
How do robo-advisors work?
How do robo-advisors work?
Signup and view all the flashcards
Study Notes
-
Exchange-traded funds (ETFs) are investment vehicles similar to a mutual fund in that they pool together different investments
-
Key differences exist between ETFs and mutual funds
-
Statements may describe both ETFs and mutual funds or neither:
- Funds aim to track a specific index and provide its average return
- Investors buy or sell their shares directly from other investors, like an individual stock
- Funds are traded at the end of the day
- Funds use a pool of money from many investors
- One type of fund has more total assets under management
-
In 2002, ETFs in the US had $102 billion under management
-
ETF assets have grown about 25% annually since 2002
Target Date Funds
- Another type of fund is a target date fund (TDF)
- TDFs are commonly used to invest for retirement
Robo Advisors
- Robo-advisors automate the investing process, serving a similar purpose as automatically picking individual investments
- Robo-advisors act like a financial advisor
- Robo-advisors generally invest in a portfolio of low-cost index funds and ETFs
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
