以下是2020 mock A 的题目，感觉我概念不是很清楚。能否区分一下以下4个概念：
（1） liquidity management，
（2） Portfolio rebalancing，
（3）completion strategies，
（4）Transition management。
并且解释一下，为什么这道题目应该是“completion strategies”，谢谢！
Ted Sorrill Case Scenario
Provident Advisers is a registered investment advisory firm that uses exchange-traded funds (ETFs) for its clients’ investment portfolios. Ted Sorrill is CEO and chief investment officer of Provident. Steve Mives, a prospective client, is a high-net-worth individual who is considering transforming his actively managed portfolio of individual stocks and bonds into actively managed and passive ETFs. Mives is considering this strategy because of the advice of his accountant, Andrew Hart. Sorrill, Mives, and Hart are meeting to discuss ETFs and their growing use in the construction of investment portfolios.
Sorrill begins the meeting by describing how ETFs are subject to the same regulations as mutual funds and noting that ETFs trade intra-day, similar to public stocks. Hart adds that ETF authorized participants conduct trades in the secondary market to eliminate the arbitrage gap and conduct trades in the primary market to both create and redeem ETF shares.
Mives asks Sorrill to describe how ETF performance is measured. Sorrill explains that most ETFs are designed to track the performance of a specific benchmark index, such as the S&P 500 Index. Sorrill cautions, however, that there are numerous sources of tracking error that may cause a deviation in an ETF’s return relative to its benchmark index. Sorrill provides an example, stating that one of the sources of tracking error is an ETF portfolio manager’s operations with short sellers.
Mives wants to maintain the current blended stock and bond benchmark allocations following his portfolio’s transition from individual stocks and bonds to active and passive ETFs. Sorrill states that whenever active ETF managers implement active views, gaps with respect to desired market exposures may result. For Mives’s portfolio, Sorrill plans to use passive ETFs to maintain benchmark exposure should any of the active ETF managers implement active views that cause changes in the portfolio’s industry sector weightings. Passive ETFs will enable Sorrill to maintain benchmark exposure while not necessarily replacing an active ETF manager.
Hart states that active ETF strategies have evolved such that market capitalization is no longer the only benchmark factor for equity strategies and that fixed-income strategies may be constructed with minimal sensitivity to movements in interest rates. He states that smart beta equity risk factors, such as dividend yield, size, value, and momentum, enable investors to implement an active view while continuing to track a designated benchmark. He then describes the strategy of smart beta fixed-income ETFs that focus on generating returns from taking credit risk and hedging out duration risk.
Sorrill’s explanation of benchmark exposure most likely describes portfolio:
A. rebalancing.
B. completion strategies.
C. liquidity management.
Solution
B is correct. Sorrill’s explanation of benchmark exposure describes portfolio completion. ETFs can be used to fill a temporary gap in exposure to an asset class. Gaps may arise whenever an active manager transitions a portfolio away from a desired market exposure (for example, the portfolio’s benchmark). An investor may use a passive ETF to maintain the exposure while retaining the manager.
A is incorrect. Sorrill’s explanation describes completion strategies, not portfolio rebalancing. Portfolio rebalancing describes how ETFs are used by investors to remain fully invested according to target weights whenever changes in market values cause a portfolio’s segments to deviate from target weights.
C is incorrect. Sorrill’s explanation describes completion strategies, not portfolio liquidity management. Portfolio liquidity management describes how ETFs are used by investors to efficiently invest excess cash balances, which reduces a portfolio’s cash drag.
Exchange Traded Funds: Mechanics and Applications Learning Outcome
- Identify and describe portfolio uses of ETFs
