1. Assuming you are choosing between an A-share open ended fund, a no-load open-ended fund, and an ETF that invests solely in domestic equity and has the same investment objective (choose Small Cap Growthwith at least a 5-year track record), explain the differences with regard to the following:

• Associated costs sales commissions and expense ratios
  • What are differences in selling commissions and embedded expense ratios?
  • Which will incur unseen transaction costsand how can we use the turnover ratio to gauge such? What are tax implications of higher/lower turnover.
• Active or passive management, and income orientation, of the securities held in the fund
  • Which can be more efficiently monitored and managed for taxable capital gains?
  • Relative to a typical Large Cap Value fund, the dividend payout of the securities in the fund, and thus the funds dividend yield?
• How the fund is priced (end of day, active trading)
  • Which is priced at NAV and which trades on an open exchange? How does this effect the timing and pricing of buying/selling an ETF vs. open-ended MF?
  • How might you benchmark (S&P 500, Russell 2000, etc..) the performance of your Small Cap Growth choices? Why is your chosen benchmark appropriate, considering your funds average market capitalization, sector concentrations, and growth/value orientation? Do you see a noticeable difference in YTD, 1, 3, and 5-year annualized performance (net of fees)? Given their different load and internal cost structures, why might there be any difference?