I do understand the two terminologies however I am confused during practicing to identify the difference.
In CAFI Mock 1, I do not get why did not we pick packeting as the right answer, is it because in case of packeting the transfer would be a portion hence it won’t be refelected as an increase in number of stocks?
Exhibit 2 S&P 500 Index Funds
Manager A** Manager B **Manager C Benchmark S&P 500 S&P 500 S&P 500 Number of holdings: fund/index 498/500 504/500 475/500 Dividends reinvested Next day Same day Next day Management fee (in basis points) 12 15 10 Rebalance Quarterly Quarterly Quarterly Reconstitution Quarterly Quarterly Semi-Annually
Q. As an indexing technique, the number of holdings in Manager B’s index most likely illustrates: