So I have got this right ?
1 ETFs are a basket of stocks held within the ETF that are traded on the market like any other stock so the traded value of the ETF may not match its intrinsic value . When I buy the ETF it is the same transaction as buying any stock
I think I got that right
2 An index fund is a basket of stocks held within the index fund but it is not traded on market .
Here is what I do not understand : When I put $100 into the index fund the fund has to purchase $100 of corresponding stocks at end of trading day? So, I cannot actually purchase or redeem an ETF until the end of the trading day ?
I had a broker tell me a index fund is actually a basket of ETFs packaged so that they can be sold by someone without a trading license, that does not sound right.
Cheers
1 ETFs are a basket of stocks held within the ETF that are traded on the market like any other stock so the traded value of the ETF may not match its intrinsic value . When I buy the ETF it is the same transaction as buying any stock
I think I got that right
2 An index fund is a basket of stocks held within the index fund but it is not traded on market .
Here is what I do not understand : When I put $100 into the index fund the fund has to purchase $100 of corresponding stocks at end of trading day? So, I cannot actually purchase or redeem an ETF until the end of the trading day ?
I had a broker tell me a index fund is actually a basket of ETFs packaged so that they can be sold by someone without a trading license, that does not sound right.
Cheers