A subset of an exchange-traded fund (ETF) that is representative of the shares comprising the fund. ETFs shares are redeemed or issued through creation units. In other words, a creation unit constitutes a large block of shares of an ETF or other unit investment trust (UIT) which are sold to institutional investors. Creation units can be exchanged with the issuer for a specific amount of ETF shares. For example, a fund’s creation unit might be 30,000 shares. That means an investor could buy 30,000 individual shares of the ETF and trade them for the underlying assets. Alternatively, the investor could buy a creation unit’s worth of underlying assets and receive ETF shares instead. Effectively, creation units help keep the price of ETF shares near their net asset value (NAV).
Exchanges
[related_posts_by_tax title="See also" posts_per_page="10" taxonomies="post_tag"]
[pt_view id=7e98706jho]
[su_box title="Watch on Youtube" style="soft" box_color="#f5f5f5" title_color="#282828" radius="2" class="" id=""][su_row class=""][su_column size="1/1" center="yes" class=""] 
[/su_column][/su_row][/su_box]
[/su_column][/su_row][/su_box]
Comments