The Creation and Redemption Process and why it Matters for ETFs
OVERVIEW Session Highlights: The Creation/Redemption mechanism as the key to understanding how ETFs works. It allows ETFs to be less expensive, more transparent, and more tax efficient than traditional mutual funds. It keeps ETF share prices trading in line with the fund’s underlying net asset value It recognize the value of the authorized participant (AP) in keeping ETF share prices in line with fair value through a process known as arbitrage. With the increasing popularity of exchange-traded funds (ETFs), the market is seeing institutional investors, consultants and individual investors alike using them for a wide range of portfolio purposes thanks to their transparency, liquidity, and the access they offer to a broad range of asset classes. In a nutshell, the purpose of this webinar is to explain what they are, how they compare to individual stocks and mutual funds, and how they work. It’s the first of a series of webinars that outline the...