Behind the Mechanics of ETF Trading, Liquidity

ETFs have become a household name as more investors adopt a tax-efficient investment tool to access niche and broad market exposures. However, many investors only have a cursory knowledge in how the relatively new investment vehicle actually works.

On the upcoming webcast, Mechanics of ETF Trading and Liquidity, Matt Lewis, Vice President and Head of ETF Implementation and Capital Markets, at American Century Investments, and Sandra Testani, Director of Product Management for Alternatives and ETFs at American Century Investments, will take an in-depth look into exchange traded funds and consider approaches to achieve the best possible execution and an overall positive trading experience.

American Century was among the latest group of money managers that turned into ETF providers. American Century Investments branched away from its six-decade history of managing traditional open-end mutual funds after launching the American Century STOXX U.S. Quality Value ETF (NYSEArca: VALQ) and American Century Diversified Corporate Bond ETF (NYSEArca: KORP).

As investors consider the time-tested American Century strategies behind these new ETFs, some may be concerned about the low trading activity with the funds. However, with ETFs, the day-to-day trading liquidity is not the indicative indicator for an ETF’s true liquidity.