A side comment on a post above:
Now if someone actually did attempt to buy $10 trillion of VTSAX, Vanguard would refuse the transaction. I think Vanguard states that they need to be notified of really large transactions beforehand, so that they can properly prepare for them, or else refuse them (in whole or in part) if necessary. And of course for very large sales, i've heard that Vanguard may hand you the underlying shares (which you then have to sell yourself) rather than handing you cash. When you're in the investor big leagues, the rules are different than they are for us little pikers.
And i suppose if VTSAX found itself in a situation where it was unable to easily buy/sell shares or derivatives, and attempting to do so would cause problems for the fund, Vanguard would just temporarily decline to accept any transactions. And/or they might close the fund for new investors, etc.
Now for an ETF, i assume the usual market rules would apply -- a large transaction would temporarily distort the ETF price, and might or might not get filled. And i suppose the ETF management monitors these situations and will then take steps to compensate by buying/selling underlying stock shares?
Now if someone actually did attempt to buy $10 trillion of VTSAX, Vanguard would refuse the transaction. I think Vanguard states that they need to be notified of really large transactions beforehand, so that they can properly prepare for them, or else refuse them (in whole or in part) if necessary. And of course for very large sales, i've heard that Vanguard may hand you the underlying shares (which you then have to sell yourself) rather than handing you cash. When you're in the investor big leagues, the rules are different than they are for us little pikers.
And i suppose if VTSAX found itself in a situation where it was unable to easily buy/sell shares or derivatives, and attempting to do so would cause problems for the fund, Vanguard would just temporarily decline to accept any transactions. And/or they might close the fund for new investors, etc.
Now for an ETF, i assume the usual market rules would apply -- a large transaction would temporarily distort the ETF price, and might or might not get filled. And i suppose the ETF management monitors these situations and will then take steps to compensate by buying/selling underlying stock shares?
Statistics: Posted by MadHungarian — Fri Oct 25, 2024 2:20 am