ETF Basics and Structure: FAQs Investment Company Institute

The creation and redemption mechanism in the ETF structure allows the number of shares outstanding in an ETF to expand or contract based on demand. Each business day, ETFs publish the creation and redemption baskets for the next trading day. The creation and redemption baskets are specific lists of names and quantities of securities, cash, and/or other assets.

Trackinsight ETF data from 17th to 21st November, 2025

• The figure is a sum of the normalized security weight multiplied by the security Carbon Intensity.
• Others follow factor-based metrics—indexes that first screen potential securities for a variety of attributes, including dividend payments, value, or growth—and then weight the selected securities equally or by market capitalization.
• Until 2008, the SEC only approved exemptive relief orders for ETFs that tracked specified indexes.

All ETFs registered as investment companies with the SEC, as well as nonregistered ETFs, are included in the statistical release. Statistics contained in the report have been obtained from information provided to ICI by exchange-traded funds. The https://calvenridge.co.com/ performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted.

Fluctuations in the price of gold could materially and adversely affect an investment in the shares. The price received upon the sale of the shares, which trade at market price, may be more or less than the value of the gold represented by them. 4The Fund’s adviser has contractually agreed, until at least October 31, 2026, to waive its management fees to 0.70% of the Fund’s average daily net assets.

In the case of an index-based ETF, the sponsor chooses both an index and a method of tracking its target index. Many early ETFs tracked traditional indexes, mostly those weighted by market capitalization. As the industry has evolved, index-based ETFs have tended to follow benchmarks that use an array of index construction methodologies, with weightings based on market capitalization, as well as other fundamental factors, such as sales or book value. Others follow factor-based metrics—indexes that first screen potential securities for a variety of attributes, including dividend payments, value, or growth—and then weight the selected securities equally or by market capitalization. Other customized index approaches include screening, selecting, and weighting securities to minimize volatility, maximize diversification, or achieve a high or low degree of correlation with the market. As other fund sponsors wanted to bring new ETFs to market, they had to obtain their own specific exemptive relief orders from the SEC.

Fidelity® Enhanced Large Cap Core ETF

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. All material has been obtained from sources believed to be reliable.

INTERNATIONAL ACCESS ETFs

Until 2008, the SEC only approved exemptive relief orders for ETFs that tracked specified indexes. These ETFs, commonly referred to as index-based ETFs, are designed to track the performance of their designated indexes or, in some cases, a multiple or an inverse (or a multiple of an inverse) of their indexes. At year-end 2024, there were 1,918 index-based ETFs—with $9.3 trillion in total net assets—that were registered with the SEC under the Investment Company Act of 1940. There were 65 APs that had registered agreements with ETF sponsors in 2024, of which 43 of them were active (i.e., they created and redeemed shares).

How do ETFs work toward their investment objective?

This difference reflects the fact that not all APs are active in any given year. For example, some APs enter into agreements with ETF sponsors so they have the option to engage in primary market activity should (and when) they want to do so. Over the years, policymakers have expressed concerns that APs will step away from their role in facilitating creations and redemptions of ETF shares during periods of market stress.