Why index mutual fund pays less license fee than ETF?
Thanks!
Anyone?
This is actually funny, cause I couldn’t find any evidence of this or understand at all, but I knew my bank’s head of ETFs so I just shot him and e-mail about this same question. Here’s his response.
“I’ve never heard that ETFs pay higher licensing fees (I would expect them to be inline) so I’m not sure what they mean. Definitely not critical to the test so don’t dwell on it too much. When I was studying for that test, I found that a lot of the material wasn’t exactly true to life. I had to momentarily erase what I knew from my actual job in order to know that the test needed me to know—especially for ETFs”
CFA also seems to provide no context behind this claim, just utilize a statement saying “generally”, so I’m curious for more background as to where this statement comes from. Interested in hearing any other opinions as well.
Thank you for your answer!! I asked Kaplan the same question and they said basically the same thing as your coworker which is not required to know for the test. The text does not mention anything about the reasoning.
I know we are good for the test on this but I just hate to remember something with no reason. I always thought everything happens for reason. Maybe this content is an exception.
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