C1T6L4 · Revised 2026-10-26

Decision and objectives

Practical task: Select an implementation for a staged equity allocation

Objectives: Compare equivalent exposure across three ownership routes; Match exit timing and control requirements; Choose a route after total-cost and liquidity analysis.

Required prior knowledge: C1T6L3. Classification: domestic. Revision: 2026-10-26. All fictional names, prices, rates, fees, calendars and tax schedules below are hypothetical unless explicitly identified as a dated document observation.

A BYF, an ordinary fund and direct holdings can target similar economic exposure while offering different rights and operational choices. The right comparison starts with the investor's objective: amount, horizon, acceptable concentration, desired trading control and cash deadline. Convenience is valuable only if its cost and residual risks are explicit.

Mechanics

Direct ownership gives the investor the specified securities, corporate actions and rebalancing responsibilities. An ordinary fund delegates portfolio decisions and normally uses its disclosed dealing process. A BYF delegates portfolio implementation while allowing exchange orders in units. The BYF's creation mechanism is separate from the retail trade. None of these routes is automatically cheapest for all sizes and holding periods.

To compare like exposure, align benchmark, dividend treatment, cash allowance and currency. A broad ordinary equity fund is not equivalent to a concentrated index BYF just because both hold stocks. Directly buying only the largest index constituents is a sampling choice that leaves tracking risk.

Price and return drivers

Compare all-in entry cash, expected/assumed gross exposure outcome, embedded expenses and exit charges over the same horizon. Do not subtract an ongoing fee from a unit return that is already after that fee. Direct holdings add the cost of reinvestment and rebalancing where the plan requires it. Include the value of a known execution price versus a later unknown unit price without inventing a monetary value for that preference.

Worked case

Hypothetical one-year TRY 100,000 starting exposure and identical benchmark exposure, no dividends outside the supplied total return. Benchmark gross return is 10%. Direct basket has TRY 300 total entry/exit/rebalancing cost, resulting in TRY 109,700. Ordinary fund's supplied unit return is 8.8%, already after expenses; investor charge TRY 50, so TRY 108,750. BYF's unit return is 9.4%, already after expenses; supplied total execution/custody burden relative to that path is TRY 500, so TRY 108,900. These values use a simplified equal invested base and separately funded costs for comparison; an actual fixed-cash order must reduce invested quantities for entry charges.

Under a hypothetical common 10% tax on each positive net gain after the supplied costs, direct cash is TRY 108,730, ordinary fund TRY 107,875 and BYF TRY 108,010. This invented common schedule isolates implementation; real tax treatment can differ by wrapper. Direct is highest on these inputs but also requires the stated rebalancing capacity.

Adverse case

Now the investor must sell a large amount during a market gap. The direct basket has uneven constituent liquidity; the BYF quote widens; the ordinary fund's redemption pays after the bill. The original cost table no longer supplies executable outcomes. If direct-basket extra slippage is TRY 2,000 while BYF extra slippage is TRY 300, their pre-tax values become TRY 107,700 and TRY 108,600. A small normal-market cost advantage can reverse. Do not assume the ordinary fund is immune: its NAV can reflect the portfolio's trading costs and stress.

Practical use

Use an authorized domestic account route appropriate to each claim, verify current instrument availability and documents, and obtain actual fee/settlement terms. A screen showing all three does not establish identical withdrawable-cash timing. Direct shares involve issuer records and corporate actions; fund units involve their own documentation. Actual tax analysis must specify income year, residency/status, acquisition dates, classification and effective rules. The common tax above is purely hypothetical and never a statement that Turkish wrappers share rates or taxable bases.

Decision boundaries

Choose direct holdings when scale, operational capacity and exposure control justify them; a BYF when exchange execution and its total cost suit; an ordinary fund when its mandate and redemption process suit. A hard cash deadline can justify retaining accessible cash rather than any equity route. Defer if supposedly equivalent products actually have different exposure or settlement. Cheapest expected implementation is not necessarily the one with the most reliable exit under the stated stress.

Practice and references

Exercise: hypothetical matched six-month exposure produces TRY 52,000 before route costs from TRY 50,000. Direct costs TRY 220, BYF costs TRY 140 and ordinary-fund total embedded drag plus investor charges TRY 190; ignore investor tax for this isolated comparison. Answer: final amounts TRY 51,780, TRY 51,860 and TRY 51,810. BYF leads by TRY 80 over direct on supplied normal costs. If its incremental stressed exit cost is TRY 200 and direct's is zero, direct leads by TRY 120. Check actual exposure and cash dates before selecting.

Takeaway: compare the exposure, the cash path and the full implementation, not only the wrapper.

Reference guide: domestic-byf; mutual-fund; ordinary-share; holding-period-return; cash-availability; direct-ownership; execution-price; rebalancing. Next: C1T7L1. Topic test.

Sources: SPK Communique III-52.1 — Articles 3–6, 14–15, 24–27; Annexes 2–3; date 2013-07-09; consolidated text lists amendments through 2024-03-01; checked 2026-10-26; SPK Communique III-52.2 — Articles 3–4 definitions; creation/redemption and index tracking sections; date 2013-11-27; checked 2026-10-26; Borsa Istanbul Equity Market Products — BYFs; real-estate certificates; commodity certificates / ALTIN.S1; date not stated; retrieved 2026-10-26; checked 2026-10-26. Source records: sources.json. Check the cited rule dates and confirm current dealing terms before any transaction.

Shared reference guide | Class examination