UBS ETF In order to proceed, you must confirm that you are an institutional investor based in Spain.
How is an index incorporated into a portfolio?
The objective of an exchange traded fund (ETF) is to track as closely as possible the index on which the ETF is based in order to provide investors in the ETF the same performance relative to the market underlying the index.
Indices are based on theoretical calculations, however, which means that costs incurred in practice, for example, for the purchase or sale of securities represented in the index are not reflected in the index calculation. Nevertheless, these costs are charged whenever an index and its performance are replicated for an investment.
How closely an ETF tracks the performance of its underlying index is therefore critical. Ideally, the performance of the ETF differs from that of the index solely in the costs and fees incurred. Since for example indices tracking only the stock market of a single country apply different criteria for index replication compared to an index containing stocks from multiple countries, the criteria for an exact index replication differ from index to index. For these reasons, UBS ETFs utilize a variety of index replication methods.
- The investor purchases ETF units on the stock exchange or directly from a market maker or authorized partner (OTC trading)
- The market maker or authorized partner either pays cash (for physically and synthetically replicated ETFs) or delivers the requisite securities (only for physically replicated ETFs) to the ETF