Visual Guide to ETFs

Executing Daily Rebalances in Low-Volume ETFs

Another issue that arises in the ETF marketplace now is that big investors are able to get large trades executed in low-volume ETFs but are having difficulty managing their daily cash and position changes when executing smaller size in the same funds.

Let me explain the situation further before offering a solution. In our example, the client is an asset manager, either a registered investment advisor (RIA) or a pension or endowment, running a portfolio of ETF positions. They have decided that this particular ETF with the Indian underlying provides the right exposure for their objectives. For our example, we’ll use a hypothetical fund. The fund trades only 9,800 shares per day on average. The ETF has ...