Method of exchange that allows exchange traded funds (ETFs) to be traded liquidly throughout the day. This feature of ETFs distinguishes them from mutual funds, which can be traded only after their net asset value is computed at the end of the trading day.
Related information about redemption mechanism:
- Redemption Mechanism Definition | Investopedia
Refers to how market makers of exchange traded funds (ETF) can reconcile the differences between net asset value (NAV) and market values when shares of ...
- What is the ETF Creation/Redemption Mechanism?
Behind every successful ETF is the creation/redemption mechanism, and understanding it is the key to grasping why ETFs have become one of the hottest ...
- What is redemption mechanism? definition and meaning
Definition of redemption mechanism: Method of exchange that allows exchange traded funds (ETFs) to be traded liquidly throughout the day. This feature of ...
- Creation and Redemption - iShares
This creation and redemption mechanism helps keep ETF supply and demand in continual balance and provides a "hidden" layer of liquidity not evident by ...
- An ETF Lesson - Part I - Kid Dynamite's World
Sep 21, 2010 ... So, back to our SPY ETF – the reason this works is precisely because of the creation/redemption mechanism. If “the market” is lacking SPY ...
- why-is-gld-so-hard-for-people-to-understand-an-etf-lesson-part-iii
Nov 27, 2010 ... Via the creation/redemption mechanism. I'll quote myself from the ETF Lesson Part I: “If “the market” is lacking GLD sellers, and the price of GLD ...
- 1.2 Key ETF Attributes | ETF insight
Where that tight relationship isn't reflected in market prices, the DB can – thanks to the creation/redemption mechanism, arbitrage the difference – in the process ...
- Redemption & Reality in High Yield ETFs | iShares Blog
May 24, 2012 ... Investors should note that not all fixed income ETFs use the same creation and redemption mechanism employed by HYG. I would recommend ...