Which of the following describes why exchange-traded funds have less need for a portfolio manager than closed-end funds?
A) ETFs normally invest in stocks, bonds, or securities within a specific index.
B) ETFs are actively managed.
C) ETFs have portfolio managers that actively select stocks and other securities on a regular basis.
D) ETF fees are generally higher.
E) ETFs usually hold investments in a minimum of three indexes.

Question

Quizplus · Accepted Answer

ETFs typically track and replicate a specific index, meaning that there is less need for a portfolio manager to actively select stocks and securities on a regular basis. Closed-end funds, on the other hand, are actively managed and require a portfolio manager to select investments for the portfolio. Additionally, ETF fees are generally lower than closed-end fund fees. The other options (B, C, D, E) are incorrect because they either suggest incorrect information or do not address the question asked.

Which of the Following Describes Why Exchange-Traded Funds Have Less