ETF Mechanics
In-Kind Redemption
Definition
What is In-Kind Redemption?
The redemption of ETF shares in exchange for a basket of securities rather than cash.
Example in practice
How This Looks in Practice
A participant returns ETF units and receives the underlying securities.
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Related Terms
ETF Mechanics
Creation Unit
A large block of ETF shares exchanged between the fund and authorised participants.
ETF MechanicsAuthorised 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.
Fund OperationsDealing Cut-Off Time
The deadline by which a valid fund instruction must be received for a particular dealing day.