Morley Conn

There is exchange in kind, which is exchanging the underlying securities that make up the ETF.

And then there's also a cash exchange, where instead of providing them with the ETF securities, I give them cash, which the buyer gave to me, exchanged to me, and then the issuer will go out and buy those securities.

So there's a few different ways that the creation redemption process will occur.

The portfolio managers, because the ETFs will trade intraday, the portfolio managers need to be up on the liquidity requirements in the baskets, in the various ETFs that they manage.

It's definitely a different portfolio management experience than you would see in a traditional mutual fund.

They need to make sure that they have sufficient cash intraday

to cover off the various flows of funds that they're going to see.

And that can be very active for more liquid, actively traded ETFs, guys.

With ETFs, you can trade intraday or you can also trade end of day.

With the ETF, though, as well, guys, is that those secondary flows that I mentioned that occur on the board, they can occur and you can have so much trade intraday on an ETF that it doesn't actually lead to a creation requirement, a creation or a redemption requirement necessarily.

So because there's the ability to trade in the market all day, the portfolio managers might not even be impacted by that.

Whereas with a mutual fund, you don't have that offset.

And so you might have a net equal buyer and seller on a mutual fund, but it's a lot less likely.

Correct.

In the US, US markets, you'll see trading of 20 to 30 times.

That's the run and gun cowboy Wild West.

You'll have 20 to 30 times the volume of ETF trading than you will see in primary net inflow or outflow for that matter.

It's usually been inflow in these markets, but it's net inflow that you will see.

Canada's a little more tame and it's closer to somewhere between six to 10 times, but you definitely see a lot more trade in the market in these funds than you do see in net new issuance.

The capital gains refund mechanism is a refund.