Coud anyone explain me this? cant find anything good in google…
what is the difference betweem diversification and diversification ratio? thanks
editing and also which funds trade at NAV and why? ETFs, mutual funds closed ended or open ended?
ETFs are not open nor closed ended mutual funds, ETFs are not mutual funds at all. It is basket of assets or are linked to some index, sector or simillar. They are quoted and traded as stock on market so it is more simillar to closed than to open ended funds.
Open ended funds have daily shares quoted at NAV.
Diversification meaning is adding new assets to portfolio in order to reduce the risk of the portfolio. To be effective diversification process, assets in portfolio should be negatively correlated with each other.
The diversification ratio should be a measure the portfolio overal risk.