As part of a series of articles delving into some of the areas of ETFs which regulators have examined, Nick Sudbury looks at the mechanics of how ETFs trade
ETFs are deceptively simple investments that perform like an index tracking fund while trading like a share. This attractive combination has led the ETF market to grow to AUM of almost $1.5trn. The rapid development of the industry has raised a number of concerns that are currently being assessed by the various regulatory bodies. But investors need not be unduly alarmed as long as they fully evaluate the risks and examine how these products work. Core process ETFs operate in both a primary and a secondary market, a process which starts with the issuer, which is the firm resp...
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