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#11
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So in a traditional index fund I give money to the index fund provider, like Vanguard. And they increase their stake in the index fund by the proportion of their total holdings that I represent. Meaning they do this by literally buying more of every stock on the index fund. Conversely when I sell the fund they are literally selling a proportionate amount of shares of each stock on the index and then giving me the money. Is that correct?
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#12
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[ QUOTE ]
So in a traditional index fund I give money to the index fund provider, like Vanguard. And they increase their stake in the index fund by the proportion of their total holdings that I represent. Meaning they do this by literally buying more of every stock on the index fund. Conversely when I sell the fund they are literally selling a proportionate amount of shares of each stock on the index and then giving me the money. Is that correct? [/ QUOTE ] Essentially yes. |
#13
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High Five!
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