Skills questionnaire

Funds, ETFs, Variable Capital Investment Companies (Sicav), Certificates

1. What do we mean by Exchange Traded Fund (ETF)?
Index funds, passively managed and traded on the Italian and foreign stock exchanges.
Securitized derivative financial instruments.
Joint-stock company with the purpose of collective investment of the assets, in the form of shares to the public.

2. What do we mean by Certificates?
Index funds, passively managed and traded on the Italian and foreign stock exchanges.
Joint-stock company with the purpose of collective investment of the assets, in the form of shares to the public.
Securitized derivative financial instruments.

3. What are the differences between synthetic and physical replication ETFs?
Synthetic replication ETFs use a total return swap contract instead of a physical holding of the benchmark components as in physical replication ETFs.
UCITS ETFs (Collective Investment Schemes) offer higher returns.
Synthetic replication ETFs are not exposed to any counterparty risk, while physical replication ETFs are more exposed.

4. Why have ETFs met the favor of institutional and private investors?
Because they include all the main asset classes.
Because they combine the advantages of diversified investment funds and the negotiability of shares.
Because they allow you to invest in foreign stock markets without exchanging the currency.

5. What do we mean by Asset Management Companies (AMCs)?
Companies to which the underwriters rely for the management of the fund, which act through a "delegation" mechanism.
Companies that manage the general savings of a subscriber.
National companies that monitor the management of savings by citizens.

6. What do mutual funds, ETFs and SICAVs (Variable Capital Investment Companies) have in common?
They consist of capital paid in by various investors and savers, holders of a proportional number of units.
They are securitized derivative financial instruments.
They are debt securities issued by various issuers to finance their operations.

7. Why aren’t the assets of mutual funds, ETFs and SICAVs subject to the credit risk of the management company?
Because the assets are separated from the fund and deposited with the custodian bank.
Because the capital structure is so transparent and flexible that the company in crisis would be financed by other funds.
Because they are guaranteed by the State.

8. If the SICAV is assimilated to a mutual fund, what does this mean for investors?
The investor does not buy shares but takes on the role of shareholder with the right to vote and the share capital becomes the managed assets.
The members of the SICAV lose the right to vote.
The fund's investors have to pay more fees to maintain their units.

9. Which underlying assets does the specialized intermediary that issues the Certificates allow access to?
Shares, stock indices, currency, commodities, interest rates.
Bonds, exchange rates, insurance policies.
Mutual funds, SICAVs, ETFs.

10. What markets do Certificates allow you to invest in?
Only in the domestic market.
Only in the foreign market.
Any market.

11. What are the main risks of Certificates?
Issuer risk, liquidity risk, risks related to subscription fees and unbalanced gains and losses.
Country risk, counterparty and reputational risk.
Operational risk, migration risk, downgrading and legal risk.

12. What are the strengths of Certificates?
Undistrainability and unseizability.
Diversification, negotiability and retail investment denominations (much less than € 50,000).
They can be sold as bonds.

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