ETFs

Question 1

The broker who has a contractual agreement with an ETF company to aid in the creation and redemption of ETF units

Answer 1

Designated Broker

Question 2

The processing by which the portfolio manager selects a smaller group of securities and their weighting to best match the performance of the overall index

Answer 2

Sampling

Question 3

The measure of the simple difference between the return on an underlying index or refernce asset and the return on the ETF that rtacks the index or reference asset

Answer 3

Tracking error

Question 4

ETF that invests in futures contracts of different commodities, with an underlying portfolio of money market instruments to cover the full value of contracts

Answer 4

Futures-based ETFs

Question 5

ETFs that are constructed with derivatives, such as swaps, to achieve the return effect of the index

Answer 5

Synthetic EFTS

Question 6

A type of EFT that invests in a commodity directly

Answer 6

Physical-based ETFs

Question 7

ETF investes in listed companies that are involved in exploration and development or in the processing or refining of a commodity

Answer 7

Equity-based ETFs

Question 8

Exchange-traded debt obligations issued by a bank that promise to pay investors a return on their investment based on the performance of a specific reference asset such as an index or another benchmark

Answer 8

Exchange-Traded Notes

Question 9

A type of ETF that takes a goal-oritented approach, rather than following a standard index

Answer 9

Rules-based ETFs

Question 10

ETF holdings that are focused on riskier sectors of the markets and are used to boost returns above core asset returns

Answer 10

Satellite holdings

Question 11

ETFs that are focused on commodity holdings or holdings that replicate or are realted to commodities

Answer 11

Commodity ETFs

Question 12

The term that describes the current cash market price of a commodity or financial instrument that is avilable for immediate delivery

Answer 12

Spot price

Question 13

The type of loss that can result when a near-term futures contract approaches expiration and is rolled over into a more distant conrtact

Answer 13

Roll Yiled Loss

Question 14

What are the typically passive ETF investments that are intended to provide the majorirty of returns

Answer 14

Core Holdings

Question 15

A type of ETF that delivers daily investment results that correspond to a multiple of the daily performance of a reference index

Answer 15

Leveraged ETFs

Question 16

What is an open-end MF trust, trading on major stock exchanges, that holds same stocks in the same proportion as those included in a specific stock index?

Answer 16

Exchange-traded Funds

Question 17

Types of ETFs

Answer 17

Standard ETF (index-based ETF)
Rules-based ETF
Active ETF
Synthetic ETF
Leveraged ETF
Inverse ETF
Commodity ETF
Covered Call ETF