Creation and redemption
The mechanism by which the number of units in an exchange-traded fund changes on demand: a large participant delivers a basket of assets and receives units, or returns units and receives assets.
How to read the number
This is why the exchange price of a unit stays close to the calculated one: a visible gap gives the participant a way to earn, and his actions close the gap.
When the metric lies
The mechanism halts exactly when it is needed: if the underlying assets stop trading the basket cannot be assembled, and the unit price on the exchange detaches from asset value without a limit.
Also known as: in-kind creation