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One of the major concerns of the proposal by the American Stock Exchange to offer actively traded Exchange Traded Funds or ETFs is transparency. The more investors are able to determine the underlying value of a portfolio, the better they are able to make a decision to invest. Front running an ETF portfolio would allow some investors to peer inside the fund and determine the next day's transaction.
One suggestion the AMEX has offered would be to create a substitute portfolio but that will be open to lengthy debate before the SEC approves such funds. The problem is the difference, even if it is slight, of the underlying value of the portfolio and the actual net asset value or NAV. [ Close Window ] This site and all its contents are copyright 1998-2005 by Paul Petillo/Editor/BlueCollarDollar.com. All Rights Reserved. |