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Exchange Traded Funds – ETFs


WHAT ARE EXCHANGE TRADED FUNDS (ETFS)?

ETFs are investment funds that track an index, and are divided into equal units which are traded on the exchange during official trading hours. ETFs enjoy advantages of both mutual funds and stocks at the same time.

INVESTING IN ETFS:

Secondary Markets: ETF Units are traded on the Exchange

Primary Markets: ETF Units are created and redeemed versus the Fund Manager

CHARACTERISTICS OF ETFs:

   
Traded on Exchange (Flexibility) Yes
Visibility into Holdings (Transparency) Daily
Units Creation and Redemption Follows the Fund’s Terms and Conditions
Number of Units Open-end: Changes at end-of-day based on creations and redemptions
Pricing Secondary Markets: Market determined, close to the iNAV
Primary Markets: Net Asset Value (NAV)
Market Maker Listing requirement
Liquidity Secondary Market: Intraday, any trade size, supported by Market Maker
Primary Markets: Large minimum transaction size following the Fund’s Terms and Conditions
Investors Secondary Markets: All Types
Primary Markets: Follows the Fund’s Terms and Conditions