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ETFs 107: Using Exchange-Traded Funds for Portfolio Construction

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1.
An ETF satellite holding typically _______.
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All of the above. Satellite holdings are shorter term and attempt to exploit an investment idea. The variety of ETFs available in niche areas makes them ideal for use as satellite investments.
2.
Generally, an investor with a shorter investment horizon should have _______.
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A more conservative portfolio, invested in lower risk assets. An investor with a shorter time horizon will want to invest conservatively, in lower risk assets.
3.
Asset allocation refers to _______.
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The mix of assets in the portfolio. By diversifying assets, return can be improved or risk can be reduced.
4.
In a "core-satellite" approach to asset allocation, core holdings _______.
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Are building blocks held for long periods of time. They do not have to be low risk, but are held strategically and not for short term trading reasons.
5.
ETF investors might want to have some alternative assets such as commodities and currencies in their portfolios because those assets are less correlated to broader stock market returns.
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True. They tend to be less correlated to broader stock market returns over long periods of time. This can provide some needed diversification to ETF investors.