Why are market makers crucial for ETFs?
Dec 01, 03:12

The role of a market maker in an exchange-traded fund's (ETF) success is often underrated. An ETF is to be bought on exchanges. Retail investors can't just walk into a fund house's office and get units. Market makers create ETF units by exchanging it with the underlying basket of securities (shares or bonds). Retail investors can't create units. Market makers also create the liquidity of units on exchanges, so it's easier for you to buy ETFs, at prices closest to its actual net asset value.

Giving entry, exit points