ETF Mechanics
Creation Unit
Definition
What is Creation Unit?
A large block of ETF shares exchanged between the fund and authorised participants.
Example in practice
How This Looks in Practice
An authorised participantA financial institution permitted to create and redeem ETF shares directly with the fund. delivers a basket of securities and receives 50,000 ETF shares.
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Related Terms
ETF Mechanics
Authorised Participant
A financial institution permitted to create and redeem ETF shares directly with the fund.
ETF MechanicsETF Premium
The amount by which an ETF's market price exceeds its net asset value per share.
ETF MechanicsETF Discount
The amount by which an ETF's market price falls below its net asset value per share.
Fund OperationsDealing Cut-Off Time
The deadline by which a valid fund instruction must be received for a particular dealing day.