Beruflich Dokumente
Kultur Dokumente
7. How does the performance of an exchange traded fund compare with the
performance of its underlying index?
Exchange traded funds are designed to provide investment results that generally
correspond to their underlying benchmark index by holding a portfolio of
securities designed to give similar price and yield performance. In the secondary
market, one mechanism that helps to keep an ETF trading on the exchange at a
price close to the value of its underlying portfolio is arbitrage. Because exchange
traded funds are both created from the securities of an underlying portfolio and
can be redeemed into the securities of an underlying portfolio on any day,
arbitrage traders may move to profit from any price discrepancies between an
exchange traded fund and the portfolio, which in turn helps to close the price
gap between the two. (ETF creations and redemptions are restricted to large
transactions, typically in multiples of 50,000 shares but ranging from 25,000 to
600,000 shares, usually transacted by large investors and institutions.) Of course,
because of the forces of supply and demand and other market factors, there may
be times when shares of an exchange traded fund trade at a premium or discount
to its underlying portfolio value.
8. Can exchange traded funds be purchased on margin?
Exchange traded funds may be purchased on margin, subject to the same terms
that apply to common stocks. Investors should contact their broker regarding
initial and maintenance margin requirements.
13. Where can I find exchange traded funds listed in the newspaper?
Investors can find exchange traded funds listed in the financial section of many
newspapers under the heading "American Stock Exchange Listed Stocks." They
are also listed under "Exchange Traded Portfolios" in the financial section of The
Wall Street Journal.
14. Is the value of an exchange traded fund equivalent to the value of the underlying
index?
Not necessarily. The share price of many exchange traded funds is initially set at
a percentage of the index upon which they are based, but may differ over time
due to costs and other factors.
15. Where can I get up-to-date price information on ETFs?
The pricing of exchange traded funds is continuous on the American Stock
Exchange during normal trading hours. Investors can obtain this information
from their brokers, stock quotation systems, or on a delayed basis by clicking
here. The closing prices are also published in major newspapers on the following
business day.