ASIC financial adviser exam, Investment, debt and insurance advice strategies question: Comparing an ETF with an unlisted managed fund

ASIC examInvestment, debt and insurance advice strategies

Comparing an ETF with an unlisted managed fund, an adviser can correctly tell a client that… (i) an exchange-traded fund can be bought and sold on a licensed market during trading hours. (ii) units in every unlisted managed fund can always be redeemed within two days.

A (i) True, (ii) True
B (i) True, (ii) False
C (i) False, (ii) True
D (i) False, (ii) False

Show the answer and explanation

Answer: B. (i) True, (ii) False

Statement (i) is true: ETFs are quoted on a licensed market and traded like shares. Statement (ii) is false: redemption terms vary, and unlisted funds holding illiquid assets can delay or suspend withdrawals; an investor in a fund that is not liquid also has no cooling-off right (Corporations Regulations 2001 reg 7.9.64(1)(e), compilation 1 Sep 2026).

Common mistake

Liquidity depends on the fund's assets and terms, not just its structure.

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