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creation unit
creation unit definition - finance
The
number of shares in an exchange traded fund (ETF). An ETF is similar to a
mutual fund, but it has the objective of achieving the same return as a particular
market index. The size of the creation unit varies by fund and ranges from
25,000 to 600,000 shares. Participants engaging in the creation and redemption
process are charged a fee, which varies. One well-known ETF is Spiders, or
SPDRs, which invests in all the stocks included in the S&P 500 Composite
Stock Price Index.
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
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