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ETFs and Fund Valuation

Collective capital investments are certificated by units or shares. The stake in the fund assets is determined by the number of units in relation to the total number of units issued.

The price of a unit or share corresponds to the net asset value (NAV) divided by the number of units issued. If the value of the fund assets increases, so does the price of the individual units.

The fund management company calculates and publishes the net asset value on a daily basis and in some cases on a weekly basis. In the case of exchange traded funds, a third-party company appointed by the issuer calculates the indicative net asset value (iNAV).

Creation and redemption process for ETFs and ETSFs

The following special features apply to the creation and redemption of units of ETFs (active and passive) and ETSFs compared to conventional investment funds:

Creation Market makers have the option of acquiring new units directly from the fund company. The fund company then creates new units. The proceeds are then invested in the fund's investment instruments. This process increases the net asset value and the number of units issued (creation process).
Redemption Investors may request that the fund company redeem their units. This reduces the fund's assets by the number of units redeemed (redemption process). The creation and redemption of units in the primary market ensures that the ETF (active and passive) or ETSF is traded at a price that is close to the indicative net asset value (iNAV) of the secondary market.