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The mechanism for creating new ETF units ensures that there is not a significant premium or discount. If there was a premium or discount, the tracking error for ETF trackers would be unacceptable. The mechanism for creating or removing ETF units is dynamic, unlike the formal mechanism of issuing new shares (or for share buy backs) needed for investment trusts.
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Market liquidity determines price. No buyers. Discounts occur. Takes two parties to trade. Many ETF's aren't traded frequently.coyrls said:The mechanism for creating new ETF units ensures that there is not a significant premium or discount. If there was a premium or discount, the tracking error for ETF trackers would be unacceptable.0 -
I'm just trying to get my head around this particular concept - the HSBC global fund, is that an example of an etf?0
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No, just ignore the posts about ETF's, the thread has gone a bit off tangent ( it often happens )Sandra97 said:I'm just trying to get my head around this particular concept - the HSBC global fund, is that an example of an etf?3
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