ETF liquidity: Don't judge an ETF by its size

Assets can vary

David Abner, head of Europe at WisdomTree, talks about the key factors affecting the assets under management (AUM) of an ETF.

The assets under management (AUM) of an ETF can change, and there are two factors which cause this: daily valuation changes, and net shares created and redeemed. The AUM and the shares outstanding of each ETF are publicly disclosed daily and are available to all investors through numerous sources, including issuer websites.  The market movement of the underlying basket and the creation and redemption activity change the AUM on a daily basis. FCA: Investors overlooking passives despite £109bn in expensive 'passive mirrors' However, the trading volume of an ETF does not have a dir...