What is an ETF?
| Feature |
Mutual Fund |
ETF |
| Investor purchase/ redemption of shares |
Investor contributes cash directly to fund for fund shares, and vice versa for redemptions |
Investor buys and sells shares on a secondary market (i.e., not directly from fund). Only market maker or "authorized participants" trade directly with the fund, typically in blocks of 50k - 100k shares. |
| Fund's investment of new proceeds or meeting requests for redemptions |
The fund buys securities to put new cash to work, or sells portfolio securities to meet redemption requests |
ETF typically exchanges ETF shares "in-kind" with market makers in return for portfolio securities, and vice versa for redemption requests. This largely avoids the need for the ETF to buy and sell securities directly.
|
| Intraday requests to buy and sell shares |
Orders are executed at the end of the trading day's NAV, directly with the fund |
Investors can trade at negotiated prices (with market maker support/ intervention) on the open market intraday |
| Shorting, buying on margin |
Can not short or buy on margin |
Shorting and buying on margin allowed |
| Recordkeeping |
Daily share pricing, with ability, in some cases, to track underlying shareholders through transfer agent function |
Continuous pricing fluctuation. Shares held in the brokerage account. |
ETFs are subject to risk similar to those of stocks including those regarding short-selling and margin account maintenance.
Unlike mutual funds, investors are subject to commission charges for each buy and sell trade executed for an ETF.
There are risks involved with investing in ETFs including the loss of money. Additional information regarding the risks of this investment is available in the disclosure.
The ETFs are new and have limited operating history.
Shares are not individually redeemable. Investors buy and sell shares on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund(s), typically in blocks of 50,000 shares.
An investor should consider investment objectives, risks, charges and expenses carefully before investing. The Prospectus
contains this and other information. For more complete information about the Grail American Beacon ETFs or to obtain a Prospectus, call (415) 677-5870. For more complete information about the McDonnell ETFs or to obtain a Prospectus, call (415) 677-5870. For more complete information about the RiverPark ETFs or to obtain a Prospectus, call (212) 484-2100. Please read the Prospectus carefully before investing.
Grail American Beacon Large Cap Value ETF, Grail McDonnell Intermediate Municipal Bond ETF, Grail McDonnell Core Taxable Bond ETF, RP Growth ETF, RP Focused Large Cap Growth ETF, RP Technology ETF and RP Financials ETF are distributed by ALPS Distributors, Inc.
ALPS Distributors, Inc. is not affiliated with the Sub-Advisors Brandywine Global Investment Management, LLC, Hotchkis and Wiley Capital Management, LLC, Metropolitan West Capital Management, LLC "MetWest", Wedgewood Partners, RiverPark Capital or McDonnell Investment Management, LLC.
© 2009-2010 Grail Advisors, LLC - All rights reserved.
