Where do exchange traded funds initially come from?
Exchange traded funds are “created” by large investors and institutions in block-sized units of shares (or multiples thereof) known as “Creation Units” of a respective ETF. A creation requires a deposit with the trustee for a specified number of shares of a portfolio of securities closely approximating the composition of the specific index and a specific amount of cash in return for shares of a specific exchange traded fund. Similarly, block-sized units of exchange traded fund shares can be redeemed in return for a portfolio of securities approximating the index and a specified amount of cash.
Exchange traded funds are “created” by large investors and institutions in block-sized units of shares (or multiples thereof) known as “Creation Units” of a respective ETF. A creation requires a deposit with the trustee for a specified number of shares of a portfolio of securities closely approximating the composition of the specific index and a specific amount of cash in return for shares of a specific exchange traded fund. Similarly, block-sized units of exchange traded fund shares can be redeemed in return for a portfolio of securities approximating the index and a specified amount of cash.
Exchange traded funds are “created” by large investors and institutions in block-sized units of shares (or multiples thereof) known as “Creation Units” of a respective ETF. A creation requires a deposit with the trustee for a specified number of shares of a portfolio of securities closely approximating the composition of the specific index and a specific amount of cash in return for shares of a specific exchange traded fund. Similarly, block-sized units of exchange traded fund shares may be redeemed in return for a portfolio of securities approximating the index and a specified amount of cash.
Exchange traded funds are “created” by large investors and institutions in block-sized units of shares (or multiples thereof) known as “Creation Units” of a respective Exchange traded fund. A creation requires a deposit with the trustee for a specified number of shares of a portfolio of securities closely approximating the composition of the specific index and a specific amount of cash in return for shares of a specific Exchange traded fund. Similarly, block-sized units of Exchange traded fund shares can be redeemed in return for a portfolio of securities approximating the index and a specified amount of cash.
