- CFA Exams
- Dec. 2020 Level 2
- Study Session 16. Portfolio Management I
- Reading 43. Exchange-Traded Funds: Mechanics and Applications
Reading 43. Exchange-Traded Funds: Mechanics and Applications
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Learning Outcome Statements
| Reading 43. Exchange-Traded Funds: Mechanics and Applications | |
|---|---|
| 1. The creation/redemption process of ETFs a. explain the creation/redemption process of ETFs and the function of authorized participants; | |
| 2. Trading and settlement b. describe how ETFs are traded in secondary markets; | |
| 3. Sources of tracking error for ETFs c. describe sources of tracking error for ETFs; | |
| 4. ETF trading costs d. describe factors affecting ETF bid-ask spreads; e. describe sources of ETF premiums and discounts to NAV; | |
| 5. Total costs of ETF ownership f. describe costs of owning an ETF; | |
| 6. Types of ETF risk g. describe types of ETF risk; | |
| 7. ETFs in portfolio management h. identify and describe portfolio uses of ETFs. |