When investors want to sell their ETF holdings, they can do so by one of two methods. The first is to sell the shares on the open market. This is generally the option chosen by most individual investors. The second option is to gather enough shares of the ETF to form a creation unit, and then exchange the creation unit for the underlying securities. This option is generally only available to institutional investors due to the large number of shares required to form a creation unit. When these investors redeem their shares, the creation unit is destroyed and the securities are turned over to the redeemer. The beauty of this option is in its tax implications for the portfolio.
We can see these tax implications best by comparing the ETF redemption to that of a mutual fund redemption. When mutual fund investors redeem shares from a fund, all shareholders in the fund are affected by the tax burden. This is because to redeem the shares, the mutual fund may have to sell the securities it holds, realizing the capital gain, which is subject to tax. Also, all mutual funds are required to pay out all dividends and capital gains on a yearly basis. Therefore, even if the portfolio has lost value that is unrealized, there is still a tax liability on the capital gains that had to be realized because of the requirement to pay out dividends and capital gains.
ETFs minimize this scenario by paying large redemptions with stock shares. When such redemptions are made, the shares with the lowest cost basis in the trust are given to the redeemer. This increases the cost basis of the ETF's overall holdings, minimizing its capital gains. It doesn't matter to the redeemer that the shares it receives have the lowest cost basis, because the redeemer's tax liability is based on the purchase price it paid for the ETF shares, not the fund's cost basis. When the redeemer sells the stock shares on the open market, any gain or loss incurred has no impact on the ETF. In this manner, investors with smaller portfolios are protected from the tax implications of trades made by investors with large portfolios.
An ETF has many advantages over a mutual fund including costs and taxes. The creation and redemption process for ETF shares is almost the exact opposite of that for mutual fund shares. When investing in mutual funds, investors send cash to the fund company, which then uses that cash to purchase securities and in turn issues additional shares of the fund. When investors wish to redeem their mutual fund shares, they are returned to the mutual fund company in exchange for cash. Creating an ETF, however, does not involve cash.
The process begins when a prospective ETF manager (known as a sponsor) files a plan with the U.S. Securities and Exchange Commission to create an ETF. Once the plan is approved, the sponsor forms an agreement with an authorized participant, generally a market maker, specialist or large institutional investor, who is empowered to create or redeem ETF shares. (In some cases, the authorized participant and the sponsor are the same.)
The authorized participant borrows stock shares, often from a pension fund, places those shares in a trust and uses them to form ETF creation units. These are bundles of stock varying from 10,000 to 600,000 shares, but 50,000 shares is what's commonly designated as one creation unit of a given ETF. Then, the trust provides shares of the ETF, which are legal claims on the shares held in the trust (the ETFs represent tiny slivers of the creation units), to the authorized participant. Because this transaction is an in-kind trade — that is, securities are traded for securities—there are no tax implications. Once the authorized participant receives the ETF shares, they are sold to the public on the open market just like stock shares.
When ETF shares are bought and sold on the open market, the underlying securities that were borrowed to form the creation units remain in the trust account. The trust generally has little activity beyond paying dividends from the stock, held in the trust, to the ETF owners, and providing administrative oversight. This is because the creation units are not impacted by the transactions that take place on the market when ETF shares are bought and sold.
Here is the weekly material for the week of Jan.23 29, 2017. TB
Watchtower -WEEK OF Jan 23-29.doc
Watchtower -WEEK OF Jan 23-29.pdf
CBS JANUARY 23-29.pdf
MEETING WORKBOOK week of Jan 23-29.pdf
Additional Highlights-Jan 23-29, 2017.pdf
You're supposed to be the genius here. You’re the man with the plan because of your insight in the Bethel House. Your questions just come to show how clueless you really are. If you can’t further your research on why Malcolm X and Muhammad Ali disassociated themselves from the Nation of Islam.
Figure it out. Read their “Bios”
Your false perception is your own undoing.
You haven’t figured out that everyone including you, have a problem with words.
the capacity or power of persons or things to be a compelling force on or produce effects on the actions, behavior, opinions, etc., of others:
He used family influence to get the contract.
the action or process of producing effects on the actions, behavior, opinions, etc., of another or others:
Her mother's influence made her stay.
a person or thing that exerts influence:
He is an influence for the good.
of extraordinary quality, as if arising from some external creative impulse
(of air or another substance) that is breathed in
Yes, I’m aware of many things you would like for it to be true to bolster your notoriety here. William Maesen's, just like any apostate driven drivel doesn’t make anything those people written anymore factual just because you're attempting to sell it as such.
As for “Fard” the scam was enlightenment, of what Christianity argument was at that time. One happened to be “hellfire”. Not that the Watchtower was playing a scam on people, rather how the Watchtower was interacting with people. Let’s not start twisting my words, your beginning to write like “O’Maly. Now your arrogance lies with court cases after the great depression.
What common cases were those, and did “any” of those have to do with civil liberties. Rutherford was making a specific argument as was the Nation of Islam. Are you suggesting these 2 were compatible?