as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
system
mutual fund invests in mostly the same stuff as etf, but has much higher expense ratio? (biotech sector)
user
index funds, like ibb, generally lack active management, which equates to lower expenses. this is simply because the target index, the nasdaq biotechnology index in the case of ibb, is composed of known quantities. this means there won't be stock pickers or analysts constantly swapping holdings, increasing the turnover rate of the portfolio and increasing capital gains; costs that are offset by higher expense ratios in more actively managed funds.
assistant