Exchange Traded Funds Simulation

• Choose a target index or strategy to replicate

• Build a fund portfolio based on liquidity, costs, and exposure needs

• Monitor performance against the benchmark and manage tracking error

• Rebalance holdings in response to index changes and market shifts

• Respond to inflows/outflows and adjust positions for liquidity

• Present fund performance, tracking rationale, and lessons learned

The simulation gives students direct experience managing passive investment products under real-world constraints. They will learn how to:

• Construct and rebalance ETF portfolios effectively

• Analyze the trade-offs between tracking accuracy and cost efficiency

• Interpret flows, volatility, and benchmark changes

• Recognize how market microstructure affects ETF pricing

• Communicate ETF strategy clearly to investors and internal teams

• Appreciate the strategic and operational complexity of "passive" investing

• Do students need prior investing or ETF knowledge? Not necessarily. The simulation includes onboarding content to explain ETF basics, replication methods, and benchmark tracking.

• Can instructors choose different indices or sectors? Yes. Instructors can select from equity indices (e.g. S&P 500, MSCI sectors) or thematic indexes (e.g. clean energy, tech, ESG).

• How long does it take? The simulation typically runs over 2–3 hours but can be extended to accommodate multiple rebalancing cycles and presentations.

• Is it suitable for individual or group play? Both. Team formats often mirror real-world ETF management structures with separate roles (strategy, trading, reporting).

• How is student performance evaluated? Based on tracking error, cost efficiency, responsiveness to flows and rebalancing events, and clarity of strategy presentation.