Asked on 25 Jun 2019
Anyone heard of class creation or cash creation for unit trusts? Heard it allows the rich people to buy unit trust at nav instead of current price. Thus, undercutting and diluting all retailers in a unit trust holdings.
Is this related to creation units for ETFs? Those are part of the market structure that ensures the price of the ETF is closely aligned to the value of the underlying assets.
Not sure how it relates to unit trusts where you have to redeem/purchase through a fund manager, it sounds similar but as you said seems to be in conflict with interests of unit holders.