ETFs Bad

[Guppies]

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?

[DesertCat]

[ 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.

[Guppies]

High Five!