Tim Buckley: Greg, a lot has been written about ETFs in the present market place environment. They are generating up the preponderance of trading out there. They are delivering a ton of liquidity. Now, 90% of the trading that goes on with ETFs takes place in the secondary market place. Just two investors are finding each other in the market place and they are environment the rate. In the ten% of instances exactly where there is an AP (approved participant) involved, why don’t you explain that procedure? Since as a result, items like discounts appear into enjoy, and I assume it would be beneficial for our purchasers to understand that a minimal little bit improved.
Greg Davis: So what happens in a redemption scenario is an AP would be providing ETF shares to Vanguard. Vanguard would in essence be providing the underlying bonds of that ETF again to the AP.
Tim: And so there the AP will get a basket of bonds.
Greg: That is suitable.
Tim: They are not receiving funds, they are receiving a basket of bonds that they are heading to have to promote. In a risky environment, they are definitely not fairly guaranteed what they are heading to be equipped to promote.
Greg: And there is higher uncertainty all-around the pricing of people bonds. And so they are heading to cost individuals, generally, some insurance coverage for the cost for any uncertainty all-around the rate that they are heading to get in the marketplace when they have to go as a result of and liquidate all people individual line products.
Tim: So when an trader sees a discounted on an ETF, they definitely need to say that, hey, which is the rate of liquidity. If I want out now which is what I’m heading to have to shell out.
Greg: So which is anything that totally have to make in. But they need to also assume if they don’t want liquidity at that stage in time, they are improved off waiting. Proper, they are improved off waiting. But if you want that liquidity, which is the rate you have to shell out.