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1.
Why are index funds generally predictable?
Both of the above. Their returns and their makeup are based upon the underlying index, and this makes them move in line with the underlying index.
2.
Which is not an advantage of indexing?
Great stock-picking. Index funds are generally low-cost and predictable. Index-fund managers don't pick stocks in the traditional sense, though.
3.
Funds of funds directly buy _______.
Other mutual funds. A fund of funds literally owns other mutual funds. Those funds may own stocks, bonds, or both.
4.
An index-fund manager _______.
Buys what an index does. Index-fund managers are passive investors: They buy what an index does. What they like or don't like doesn't factor into what gets bought or sold.
5.
How have some mutual fund families eliminated the double fees found in funds of funds?
They offer funds of funds that invest only in their own funds. Some of the larger fund families charge you fees for the underlying funds but not for the funds of funds.
