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FAQs
Subject
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Mutual Fund/ETF
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Index rebalancing related to passive fund
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Index rebalancing related to passive fund
Derivatives used by the passive fund manager
Date: 25 FEB
Answered By: Tasis Management
Question
Why derivatives are used by the passive fund manager?
Answer
a. Get instant exposure to new stock without immediately buying shares in the market.
b. Avoid pushing price up,
c. Helps in saving transaction cost as futures are cheaper,
d. Helps in matching the index exactly on the rebalancing day
Allah Knows Best...