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US 2009/0024537 A1Published application
Exchange-traded fund and process for trading same
OwnerJan van Eck, Joseph LaCorteinventors
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OwnerJan van Eck, Joseph LaCorteinventors
Estimating the term…
The invention provides an exchange-traded fund for the trading of relatively illiquid securities and a process for forming and trading the same. The exchange-traded fund includes securities that are component securities of an Underlying Index and securities that are not component securities, thereby affording Authorized Participants the flexibility to designate securities within each category for inclusion in a portfolio deposit for the creation of a Creation Unit. This approach is necessitated by the relatively illiquid securities such as municipal bonds that lack sufficient liquidity for easy assembly in the amounts necessary for the in-kind creation or redemption of Creation Units for typical exchange-traded funds. This approach facilitates the ability of Authorized Participants to assemble a portfolio deposit and thereby allow for the effective functioning of an arbitrage process, while simultaneously enhancing the ability of the exchange-traded fund to track the applicable Underlying Index.
A process to facilitate in-kind creation and redemption of shares of an ETF which seeks to replicate the performance of an index or indices comprised substantially of relatively illiquid securities, comprising the steps of:
A process to facilitate in-kind creation and redemption of shares of an ETF which seeks to replicate the performance of an index or indices comprised substantially of relatively illiquid securities, comprising the steps of:
The process of claim 19, wherein the relatively illiquid component securities are selected from the list consisting of municipal bonds, ABS, 144As, MSS, CDOs, and CLOs.
A fund for facilitating in-kind creation and redemption of shares of an Exchange traded Fund, the fund comprising shares related to a multiplicity of categories based on risk and return characteristics of relatively illiquid component securities.
Dependencies are inferred from the claim text.