ETF的流动性

问题如下：

Seeblick Cemetery Foundation Case Scenario

With a view overlooking one of the Great Lakes, Seeblick Cemetery is an outdoor homage to over 100,000 interred residents in the US Midwest, with the grounds covering over 300 acres. The Seeblick Cemetery Foundation Investment Committee controls the $200 million endowment fund that supports operations. Committee members include representatives of many of the oldest, wealthiest, and most influential families in the area. As a compromise to differing philosophical views of the members, the fund is divided into three separate investment pools, each with its own stated equity investment mandate. Moncrief Gentry is the equity director for all pools. He oversees the selection of investment managers and determines benchmarks to use to evaluate performance.

The investment mandate for Pool 1 includes two primary goals:

• A goal to be cost conscious with a preference for index investing

• A goal to be ESG (environmental, social, and governance) sensitive by preferring investments that focus on companies that help the environment with respect to clean energy and climate change

The mandate of Pool 2 also consists of two primary goals:

• A goal that the overall stock portfolio should consist of mature companies that have stable net incomes and high dividend yields

• A goal of expressing strong views on many major corporate issues through proxy voting

Gentry interviews a potential investment manager, who explains that his expertise lies in being able to enhance return or reduce cost using three techniques:

1. Dividend capture

2. Security lending

3. Covered-call writing

Gentry then considers the mandate for Pool 3:

• Since equity markets are believed to be efficient, the pool should use index approaches.

• The portfolio should be tracked on the basis of large cap versus small cap, as well as domestic, developed, and emerging markets.

• The most important benchmark feature is the liquidity of the component stocks.

Gentry reviews additional file notes from Pool 3 related to investing in exchange-traded funds (ETFs) and mutual funds:

• Mutual funds tend to have smaller taxable events than similarly managed ETFs. The foundation does not benefit from this characteristic because it is tax exempt.

• Disadvantages of using ETFs include the need to buy at the offer and sell at the bid price, paying commissions, and possibly facing illiquid markets at either purchase or sale.

• Margin buying and being able to short sell apply to ETFs, not mutual funds.

Question

Of the additional file notes from Pool 3 that Gentry reviews, which is the least accurate? The note regarding:

选项：

A.margin buying.

B.taxable events.

C.disadvantages of ETFs.

解释：

Solution

B is correct. The note on taxable events is inaccurate. ETFs have smaller taxable events than mutual funds because of the in-kind transfer of securities between an authorized participant and the fund when redemptions occur.

A is incorrect. Unlike traditional open-end mutual funds, ETF shares can be bought by investors using margin borrowing; moreover, investors can take short positions in an ETF.

C is incorrect. These are indeed the disadvantages of using an ETF instead of a mutual fund.