ETF's

[Corporate]

Hi everyone

I'm wondering whether anyone has experience investing in ETF's listed on the NZX?

I've just had a quick look at FNZ (NZX50) and USF (S&P500) and they don't seems to have much liquidity. Does anyone have any alternatives for investing in an index?

Cheers,
C

[huxley]

Hi everyone

I'm wondering whether anyone has experience investing in ETF's listed on the NZX?

I've just had a quick look at FNZ (NZX50) and USF (S&P500) and they don't seems to have much liquidity. Does anyone have any alternatives for investing in an index?

Cheers,
C

Hey Corporate

You could invest in all the NZX ETFs through SuperLife's managed funds - https://superlife.co.nz/investments/investment-options

Fees are similar & you can exit at the current unit price (liquidity shouldn't be an issue). However, I use them with a long term investment timeframe while dollar-cost averaging along the way...

If you're looking to trade, these instruments may not be suited.. you could look to the ASX? They'll probably have more depth & options..

Just a few ideas..

Cheers

[RupertBear]

Hey Corporate

You could invest in all the NZX ETFs through SuperLife's managed funds - https://superlife.co.nz/investments/investment-options

Fees are similar & you can exit at the current unit price (liquidity shouldn't be an issue). However, I use them with a long term investment timeframe while dollar-cost averaging along the way...

If you're looking to trade, these instruments may not be suited.. you could look to the ASX? They'll probably have more depth & options..

Just a few ideas..

Cheers


I was looking at getting some NZX ETFs through Smartshare but to exit them it sounded like you had to sell them yourself on the NZX?? I may well be wrong in thinking that, maybe you can exit them through Smartshares at the current unit price just like you describe for SuperLife?? I will look into Superlife options thanks

[huxley]

You're correct. If you hold the ETF through Smartshares you'll need to sell them on market and pay brokerage. The SuperLife funds pool investor's $ and invest in the underlying ETFs - as a result they'll have a small allocation in cash as new funds are either invested or withdrawn. You'll want to check out the fund management fee. Oh, and you'll probably notice the whole thing is owned by and run by the NZX limited...

[peat]

Perhaps if you used all three of the NZ ETF's you would get enough liquidity. FNZ (Top Fifty) ; TNZ (Top 10) and MDZ (Mid Cap) are all thin as you say but combined may satisfy some situations. They seem to track their NTA closely enough. I suspect that there is an informal market maker so viewing the turnover may not be the full picture with regards to liquidity. see clause 19 in the Non-Standard designation waiver for these ETF listings.
I havent had any experience with these particular ETF's but I have queried the providers on a few specific points in the past, and do appreciate you raising them as an indexing option.
I wonder how could one test the liquidity without wasting money on transaction costs. I will have a look at the depth over the next week and comment further later.

[Snow Leopard]

The approx average daily turnover for the last N trading days :

Code 16 day 64 day 256 day

FNZ $114,136 $209,783 $233,357

MDZ $39,081 $69,211 $94,909

TNZ $46,155 $83,699 $92,852

Turnover varies widely from day to day and the above will include off-market transfers.

Best Wishes
Paper Tiger

[Corporate]

Thanks all

This is for long term investment so I will check out Superlife

[777]

Bids
Quantity No. Price
684 1 396
500 1 394.8
45,000 1 394.1
100,000 1 393.6

Asks
Price No. Quantity
397.1 1 45,000
397.5 1 1,000
397.6 1 100,000

The above are the quotes for MDZ at present. As I understand it the 100,000 and 45,000 buy bid and sell offer are in fact the NZX. This is applicable for all their ETF's although for different quantities. They adjust up and down with the NTA. If you sell into their bid then in a short period of time they will adjust the bid quantity back up to what it was. This, to me, gives enough liquidity but you have to accept their bid.

[Toulouse - Luzern]

Hi everyone

I'm wondering whether anyone has experience investing in ETF's listed on the NZX?

I've just had a quick look at FNZ (NZX50) and USF (S&P500) and they don't seems to have much liquidity. Does anyone have any alternatives for investing in an index?

Cheers,
C

Cheers Corporate

IMHO It all depends eg on your time frame, objectives, and what others eg. world markets, FX, Trump, et al are doing while you are investing / invested.

My experience for what it is worth ...

When the new range of ETF came out I expected to be involved but in the event am not. NZX seemed to take many years to work through to any decision on a more extensive range of ETF.

The thing for me is the very small NZX volumes = no effective market, as many days no trades in some of the ETF.

I get the SuperLife option that the last traded price applies, however it seems to me that supply and demand sets the price and as there is often no demand you dont have price action impetus in your favour.

Time gone by I invested in MZY on the NZX. At the time I was well satisfied***.

*** I found these passive markets very good when the market is in a rising uptrend but no place to be on a falling market as the investment is passive with the index.

Many will find it hard to hold on to an investment when prices start to fall rapidly.

To get over the very thin liquidity that I found (almost no market at all) of ETF on NZX,
I also invested in SPDR and IShares on the ASX

STW SPDR ASX 200
IHK Ishares Hong Kong
ISG Ishares Singapore

My experience with the ASX ones was:

XXX as above for MZY

Plus

High brokerage fees and FX variations (eg NZD AUD and and SGD) plus the frequent and rapid up and down changes in international outlooks and markets post GFC resulted in poor returns relative to high risk at the time IMHO.

Result was I exited with minor profits.

Over to each of us to decide based on our view of situation at the time of investment ...

[RupertBear]

Cheers Corporate

IMHO It all depends eg on your time frame, objectives, and what others eg. world markets, FX, Trump, et al are doing while you are investing / invested.

My experience for what it is worth ...

When the new range of ETF came out I expected to be involved but in the event am not. NZX seemed to take many years to work through to any decision on a more extensive range of ETF.

The thing for me is the very small NZX volumes = no effective market, as many days no trades in some of the ETF.

I get the SuperLife option that the last traded price applies, however it seems to me that supply and demand sets the price and as there is often no demand you dont have price action impetus in your favour.

Time gone by I invested in MZY on the NZX. At the time I was well satisfied***.

*** I found these passive markets very good when the market is in a rising uptrend but no place to be on a falling market as the investment is passive with the index.

Many will find it hard to hold on to an investment when prices start to fall rapidly.

To get over the very thin liquidity that I found (almost no market at all) of ETF on NZX,
I also invested in SPDR and IShares on the ASX

STW SPDR ASX 200
IHK Ishares Hong Kong
ISG Ishares Singapore

My experience with the ASX ones was:

XXX as above for MZY

Plus

High brokerage fees and FX variations (eg NZD AUD and and SGD) plus the frequent and rapid up and down changes in international outlooks and markets post GFC resulted in poor returns relative to high risk at the time IMHO.

Result was I exited with minor profits.

Over to each of us to decide based on our view of situation at the time of investment ...

Thanks for sharing that, very helpful, cheers

[peat]

Looking at the depth this morning for the three NZX based ETF's I referred to in my previous post there would appear to be reasonable volume of buy and sell quantities being presented. I would suggest this is sufficient for most people.

[Harvey Specter]

My understanding is the NZX ran a formal market maker for these so liquidity shouldn't be an issue unless you have a very bit holding. Having said that, you many not like the spread that market maker is offering.

[shonen knife]

The current issue that I am experiencing is that SmartShares doesn't really feel like a product. NZX provides you with a fancy website to sell you the product, but nothing once you actually buy in. To see your balance and current value it seems that you can only log into Link Market Services and see the transaction history. There is no overview to show your profit/loss, and as mentioned, they don't help with selling your units. My impression so far is that it feels half-baked.

[inestor88]

The current issue that I am experiencing is that SmartShares doesn't really feel like a product. NZX provides you with a fancy website to sell you the product, but nothing once you actually buy in. To see your balance and current value it seems that you can only log into Link Market Services and see the transaction history. There is no overview to show your profit/loss, and as mentioned, they don't help with selling your units. My impression so far is that it feels half-baked.

I thought the same thing when I first signed up, was quite annoying. Just have to manually add on ANZ, only once a month so not too much of a hassle.

[huxley]

You could follow them through Sharesight
https://www.sharesight.com/nz/

If you purchased smartshares directly you maybe don't have a broker ?(not a big deal unless you want to sell)

If not you could use either asb or ANZ for a cheap do it yourself service. You'd need to make sure you give them the CSN the smartshares are associated with.

Cheers

[voltage]

non nz Etfs much better/cheaper to purchase on the ASX, big selection. Has anyone done a cost comparison between holding through superlife or purchase on the NZX?

[Kelvin]

Can anyone point me in the direction of where to find Superlife ETF fees (nothing on their website)?

Or are the fees the same as purchasing via Smartshares?

Wouldn't NZX via a broker be more expensive than Smartshares as in Smartshares any subsequent purchases do not incur a brokerage fee?

[RupertBear]

You could follow them through Sharesight
https://www.sharesight.com/nz/

If you purchased smartshares directly you maybe don't have a broker ?(not a big deal unless you want to sell)

If not you could use either asb or ANZ for a cheap do it yourself service. You'd need to make sure you give them the CSN the smartshares are associated with.

Cheers

So unless you have a broker or have an ASB or ANZ share account you cant sell your smartshares. So the so called 'Mum and Dad" long term investors buy ETFs and then they cant sell them? Seems a fatal flaw in the system to me and it has put me off buying any.

[Kelvin]

So unless you have a broker or have an ASB or ANZ share account you cant sell your smartshares. So the so called 'Mum and Dad" long term investors buy ETFs and then they cant sell them? Seems a fatal flaw in the system to me and it has put me off buying any.

It's pretty easy to create an ASB sharetrading account - just apply online, go into branch to verify your ID. Then pay the $30 brokerage when you sell.

[RupertBear]

It's pretty easy to create an ASB sharetrading account - just apply online, go into branch to verify your ID. Then pay the $30 brokerage when you sell.

Yes that is true Kevin and I do have an ASB account. I was more thinking of people that dont have an account and dont actually want one, like my Mum for example, who probably should have shares anyway ;)

[huxley]

So unless you have a broker or have an ASB or ANZ share account you cant sell your smartshares. So the so called 'Mum and Dad" long term investors buy ETFs and then they cant sell them? Seems a fatal flaw in the system to me and it has put me off buying any.

We'll, yes.. but I guess that's the idea behind an exchange traded fund... It would've been the same situation for any "mum &a dad" investors who purchased shares in the state owned enterprises a couple of years ago.. also I don't think they try and hide the fact you have to sell on market.

If you are holding these instruments long term you don't need to worry for many years right?

Anyway, maybe it would be helpful if the NZX focused their retail offerings better. There seems to be an opportunity to align the SuperLife website with Smartshares.

[huxley]

Can anyone point me in the direction of where to find Superlife ETF fees (nothing on their website)?

Or are the fees the same as purchasing via Smartshares?

Wouldn't NZX via a broker be more expensive than Smartshares as in Smartshares any subsequent purchases do not incur a brokerage fee?

https://superlife.co.nz/superannuation/fees

[Kelvin]

https://superlife.co.nz/superannuation/fees

Thanks.

So it looks like Smartshares has a slightly higher management fee plus a $30 establishment fee, then at least a $30 fee to sell on-market

Superlife has a lower management fee and a $12 yearly admin fee. But looks like no fee to buy or sell

[shonen knife]

I rang up Smartshares the other day. I was told that I didn't need to be too concerned about liquidity and that they do purchase off the market. I probably should have asked for more details as I'm not sure how they decide what price to purchase them at.

[FIsaver]

Is going through superlife / smartshares the best way to invest in vanguard ETF's like the S&P500 or Total world stock market here in NZ?

[Dean@Smartshares]

Hi Sharetrader members,

The Smartshares team have created their own Sharetrader account. This is our first post, and our team is looking forward to answering any questions you might have about the Smartshares range of ETFs.

In this thread there were questions on the liquidity of the Smartshares ETFs. To confirm, Smartshares does have a dedicated market maker, which provides liquidity for investors with spreads around the NTA value. That means that although an ETF may not trade every day, you can buy and sell when you want because there is a market maker always posting buy and sell prices.

In addition, there were comments that some holders find it difficult to monitor their portfolio value and performance. If you visit Link Market Services at http://www.linkmarketservices.co.nz/ (Smartshares share registry) you can login and see your unit balance, tax returns, and dividends, as well as update your account details.

If you want to see current performance reporting you will need to load your holding details into a portfolio tool, such as sharesight.co.nz – this has been mentioned by several members. Smartshares does not currently offer a performance reporting tool, but we are interested in your feedback and will take this suggestion on board.

[iceman]

Well done Dean and welcome. Good to have you guys here to answer queries and guide us along with regards to the ETFs

[Thor]

In this thread there were questions on the liquidity of the Smartshares ETFs. To confirm, Smartshares does have a dedicated market maker, which provides liquidity for investors with spreads around the NTA value. That means that although an ETF may not trade every day, you can buy and sell when you want because there is a market maker always posting buy and sell prices.


Hi Dean,

I have a question about the mechanics of ETFs. Specifically around the market maker and liquidity.

1. When I look at the depth of say the MDZ, why are there apparent two sets of buy / sell prices of different volumes from what I assume is the market maker. In the case of MDZ I see a buy / sell volumes of 45,000 and 100,000 on both buy and sell sides.

2. Is the market maker autonomous or is there a human behind this? If I sell 100,000 shares, will another 100,000 shares be placed on the market for sale immediately?

3. If I try to sell 500,000 shares at the market maker price, because there is only ever 100,000 on the buy side, what happens? Will the market maker buy them all at once? Will it be immediate or does a human get involved?

4. In relation to question 2 and 3 - What happens during a liquidity event when there are a large number of sellers? How does the market maker handle this when the underlying asset values might be dropping significantly intraday.

I like the Smartshare offering, and during the normal market conditions I can see everything works fine, but I want to be clear what happens during a crisis.

[huxley]

Hi Dean,

I have a question about the mechanics of ETFs. Specifically around the market maker and liquidity.

1. When I look at the depth of say the MDZ, why are there apparent two sets of buy / sell prices of different volumes from what I assume is the market maker. In the case of MDZ I see a buy / sell volumes of 45,000 and 100,000 on both buy and sell sides.

2. Is the market maker autonomous or is there a human behind this? If I sell 100,000 shares, will another 100,000 shares be placed on the market for sale immediately?

3. If I try to sell 500,000 shares at the market maker price, because there is only ever 100,000 on the buy side, what happens? Will the market maker buy them all at once? Will it be immediate or does a human get involved?

4. In relation to question 2 and 3 - What happens during a liquidity event when there are a large number of sellers? How does the market maker handle this when the underlying asset values might be dropping significantly intraday.

I like the Smartshare offering, and during the normal market conditions I can see everything works fine, but I want to be clear what happens during a crisis.

Great questions, cheers for asking. I was wondering the samething & look forward to their answer.

[Dean@Smartshares]

Great to receive some follow up questions.

I've added your questions below with our response for ease of reading.

1. When I look at the depth of say the MDZ, why are there apparent two sets of buy / sell prices of different volumes from what I assume is the market maker. In the case of MDZ I see a buy / sell volumes of 45,000 and 100,000 on both buy and sell sides.

Smartshares: Correct, the market maker is providing two tiers of liquidity. The market maker is contracted to provide this depth and the two tiers assists in the balance of providing liquidity to the market and allowing the market maker to manage their risk exposure.

2. Is the market maker autonomous or is there a human behind this? If I sell 100,000 shares, will another 100,000 shares be placed on the market for sale immediately?

Smartsares: There is a combination of automation and human elements.
If you place an order for 100,000 shares and it traded with the market maker, the market makers volumes will typically refresh in a short period of time. The speed and volumes are determined by the market maker and will depend on the current market environment.

3. If I try to sell 500,000 shares at the market maker price, because there is only ever 100,000 on the buy side, what happens? Will the market maker buy them all at once? Will it be immediate or does a human get involved?

Smartshares: For large and wholesale investors we suggest they contact us at Smartshares and we can work through the various options such as a arranging the market maker to provide additional liquidity.

4. In relation to question 2 and 3 - What happens during a liquidity event when there are a large number of sellers? How does the market maker handle this when the underlying asset values might be dropping significantly intraday.

Smartshares: The market maker will adjust the price of the ETF units to reflect the prices in the underlying securities. So if the price in the underlying securities starts falling, the market maker will adjust the price of the ETF accordingly. If the market maker is buying ETF units (because ETFs unitholders are selling), they will offset this by immediately selling the underlying securities of the ETF. They will then redeem the ETF units they have bought for the underlying securities and deliver them for settlement.

Starting in September last year, there was a 2 month period where the S&P/NZX 50 declined approximately 13%. During that period we saw no increase in selling behaviour as the majority of investors are long term investors who do not typically react to short term events.

[Joshuatree]

Anyone subscribed to Jared Dillians monthly ETF 20/20 , US$79 year) ? Hows it been for you if so, do you actively follow his picks?
ETF 20/20 - Mauldin Economics (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0ahUKEwiYu9CkmKjXAhXFlpQKHdiKCt4QFggqMAE&url=https%3A%2F%2Fwww.mauldineconomics.com%2Forder %2Fplan%2F17125702&usg=AOvVaw3mFmSy7hNEv8d3DaGpIFiu)

[Joshuatree]

I think there is probably a mkt for trading ETF's.I would look at it later on as an option when i would want to be taking less risk ,as part of my portfolio.

[GTM 3442]

Anyone subscribed to Jared Dillians monthly ETF 20/20 , US$79 year) ? Hows it been for you if so, do you actively follow his picks?
ETF 20/20 - Mauldin Economics (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0ahUKEwiYu9CkmKjXAhXFlpQKHdiKCt4QFggqMAE&url=https%3A%2F%2Fwww.mauldineconomics.com%2Forder %2Fplan%2F17125702&usg=AOvVaw3mFmSy7hNEv8d3DaGpIFiu)

Yep. Picked up the $39 lifetime +$5pa offer. Have learned a couple of things, which means I'm square.

As far as the content goes, I worry about confirmation bias - the initial ETF 20/20 portfolio looks enough like one of mine to make me wonder if he's been looking over my shoulder.

Out of interest, the ETF20/20 portfolio is up 1.9% since publication on 27/10/2017, with the majority of the rise in the Commodities - Oil ETF (+14%) and Europe (+1%).

[sonny n share]

Simplicity launches investment funds that track the NZX top 50 and NZ bond market, under-cutting the NZX's Smartshares ETFs on feeshttps://www.interest.co.nz/personal-finance/93031/simplicity-launches-investment-funds-track-nzx-top-50-and-nz-bond-market


https://simplicityfunds.kiwi/our-funds

[JBmurc]

Exposure to 200 of the largest companies listed on the ASX – by market capitalisation, in a single trade.
Low management fees – A200 will have fees of just 0.07% p.a. (or $7 for every $10,000 invested), making A200 the lowest cost Australian shares ETF in the world.**


https://www.betashares.com.au/?utm_source=google&utm_medium=cpc&utm_content=Brand&utm_term=beta%20etf&gclid=Cj0KCQjw5LbWBRDCARIsALAbcOejqCgB1GSSnJ61odYf sdWzJ3f2atVOsb4iC3wkSq_KZyJ06E2wogcaApBwEALw_wcB

[sonny n share]

Compare investment platforms at
https://www.moneyhub.co.nz/investing--saving.html

[JFOX]

Compare investment platforms at
https://www.moneyhub.co.nz/investing--saving.html

indeed a useful site, thanks sonny_n_share

[D. Fender]

A quick question for Dean at Smartshares:

Given your ETFs are designed to track their underlying indexes, why are so many of your ETFs delivering performance a long way below the index? For example, here are the non NZ/Aus Smartshares returns since inception vs relevant benchmarks:

TWF: 4.3% p.a. vs 6.1% p.a.
USV: 5.7% p.a. vs 7.3% p.a.
USG: 6.1% p.a. vs 7.7% p.a.
EMF: 5.5% p.a. vs 7.3% p.a.
APA: 4.9% p.a. vs 6.8% p.a.
EUF: 0.4% p.a. vs 2.4% p.a.
USF: 5.8% p.a. vs 7.6% p.a.

Your non-NZ and Aussie ETFs are consistently 1.4% p.a to 2% p.a. below their benchmarks. Other than your fees, why is this?

[Dean@Smartshares]

Hi D.Fender,

Thanks for the question. I'm not sure what time period or data you are comparing and whether the index returns converted back into NZD.

A few key points on our global equity ETFs



Smartshares equity ETFs are unhedged and therefore investor returns will differ based on foreign exchange movements
Investor returns are calculated after fund charges and taxes i.e. the ETF makes a deduction for fund charges and tax obligations which includes FIF tax calculations


In addition to this it is worth noting that Investors also benefit from:



Ability to trade at local brokerage rates
Don't need to hold the assets in custody (which avoids custody charges)
Can elect to have dividends paid out or reinvested
Able to join a regular savings plan with no transaction costs

[D. Fender]

Hi D.Fender,

Thanks for the question. I'm not sure what time period or data you are comparing and whether the index returns converted back into NZD.

A few key points on our global equity ETFs



Smartshares equity ETFs are unhedged and therefore investor returns will differ based on foreign exchange movements
Investor returns are calculated after fund charges and taxes i.e. the ETF makes a deduction for fund charges and tax obligations which includes FIF tax calculations


In addition to this it is worth noting that Investors also benefit from:



Ability to trade at local brokerage rates
Don't need to hold the assets in custody (which avoids custody charges)
Can elect to have dividends paid out or reinvested
Able to join a regular savings plan with no transaction costs


Thanks Dean. I took the data from the latest Smartshares fund updates (so you should have the answer on whether the index data is in NZD) and the numbers are since inception for each fund.

Also, the advantages you list are equally applicable to a lot of managed funds, except for most managed funds there is no ‘brokerage’ on entry/exit.

[BlackCross]

Seems a pretty low key launch?
SMARTSHARES AND BLACKROCK LAUNCH EIGHT ETFS ON NZX



[*=left]EMERGING MARKETS EQUITIES ESG ETF (EMG) (https://smartshares.co.nz/types-of-funds/ishare-series/emerging-markets-equities)
[*=left]EUROPE EQUITIES ESG ETF (EUG) (https://smartshares.co.nz/types-of-funds/ishare-series/europe-equities)
[*=left]GLOBAL EQUITIES ESG ETF (ESG) (https://smartshares.co.nz/types-of-funds/ishare-series/global-equities)
[*=left]JAPAN EQUITIES ESG ETF (JPN) (https://smartshares.co.nz/types-of-funds/ishare-series/japan-equities)
[*=left]US EQUITIES ESG ETF (USA) (https://smartshares.co.nz/types-of-funds/ishare-series/us-enquities)
[*=left]GLOBAL AGGREGATE BOND ETF (AGG) (https://smartshares.co.nz/types-of-funds/ishare-series/global-aggregate-bond)
[*=left]AUTOMATION AND ROBOTICS ETF(BOT) (https://smartshares.co.nz/types-of-funds/ishare-series/automation-and-robotics)
[*=left]HEALTHCARE INNOVATION ETF (LIV) (https://smartshares.co.nz/types-of-funds/ishare-series/healthcare-innovation)

[BeeBop]

I have been hearing about it....NZX now being the list of ETFs...is it that they have only had one new company listing this year....got to rescue it with something even if it is a bunch of tracker funds.

[arekaywhy]

This is likely a fundamental trading question...why does it appear that there are single, large buy and sell trades, very close to each other, on all of these ETFs when looking at the depth of trade? It almost looks like "goal posts" around the current trade price. Almost as if to control the share price of the stock.

[blackcap]

This is likely a fundamental trading question...why does it appear that there are single, large buy and sell trades, very close to each other, on all of these ETFs when looking at the depth of trade? It almost looks like "goal posts" around the current trade price. Almost as if to control the share price of the stock.

Hi arekaywy, these bid and offers are provided by the "market maker". They are "invited" by the ETF to provide liquidity for the product. They help us the investor by giving us the ability to purchase and sell at pretty much market price. They make their money on the spread.

[arekaywhy]

Thanks blackcap, so it seems like they are controlling the market to me. If someone comes along with anything less than 50 grand to buy or sell, you get that price and don't get to take advantage of an actively moving market. I understand the idea of providing liquidity, however, this seems dodgy somehow

[blackcap]

Thanks blackcap, so it seems like they are controlling the market to me. If someone comes along with anything less than 50 grand to buy or sell, you get that price and don't get to take advantage of an actively moving market. I understand the idea of providing liquidity, however, this seems dodgy somehow

It is not dodgy at all. It means that the buyer and seller gets the right price for the underlying basket of assets. So as the underlying stocks move up or down, the market maker will adjust their price accordingly. I do not see how you can conceivable see this as being a negative or dodgy at all. It means you the purchaser or seller effectively get what its worth. If the market maker was not there, you might have to take a cent or two less than you would otherwise get. Market makers are pretty much in most ETF's globally.

[arekaywhy]

I appreciate your explanation, just trying to wrap my head around something that appears odd

[Tronald Dump]

I appreciate your explanation, just trying to wrap my head around something that appears odd

Hi, this is standard practice in ETFs (and in fact in any stock traded on the market). Market makers hold inventory to ensure investors can get liquidity if the on-screen volume is not sufficient. Remember the ETF issuer provides a daily NTA for every ETF, so you can easily see what the market value of the ETF was at yesterday’s close. Because ETFs are open ended (i.e. units can be created or redeemed any time), there is no reason why an ETF price would trade a long way from NTA.