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RETIREMENT PLAN INVESTOR

Use your plan ID (available on your account statement) to determine which employer-sponsored retirement plan website to use:

IF YOUR PLAN ID BEGINS WITH IRK, BRK, 754, 1 OR 2

Visit americanfunds.com/retire

IF YOUR PLAN ID BEGINS WITH 34 OR 135

Visit myretirement.americanfunds.com

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VIDEO: How Capital Group Capital Markets helps advisors source ETF liquidity
KEY TAKEAWAYS
  • Average daily volume (ADV) is important, but it’s only a part of an ETF’s overall liquidity profile because ETFs are open-ended securities.
  • One benefit of the creation and redemption process is the ability to purchase share amounts greater than an ETF’s published ADV, making ETFs generally more liquid investment vehicles. 
  • ETF Capital Markets works directly with our Portfolio Strategy Management team to help maximize the liquidity of our ETFs’ basket composition.

How do we support the implied liquidity and trading efficiency of our ETFs for advisors? The video below pulls back the curtain. Scott Szever, senior vice president of ETF Capital Markets, and Donald Kernizan, senior ETF Capital Markets manager, joined Douglas Yones from the New York Stock Exchange to discuss how to help financial advisors understand the full liquidity profile of Capital Group’s ETFs. 


Watch the video here, and for more information about Capital Group’s ETFs, contact your Capital Group representative.


Average daily volume (ADV) provides a measure of an ETF’s secondary market activity (but is not the most accurate indicator of the fund’s liquidity).

An authorized participant (AP) is a broker-dealer that has a contracted opportunity with the ETF issuer to create and redeem shares in the primary market to meet market demand.

A basket is a collection of securities that share certain themes or criteria, such as being in the same sector, industry or investment strategy.

The ETF creation and redemption process allows the ETF issuer to work with an AP to create and redeem the ETF’s underlying fund holdings in the primary market to meet investor demand to buy or sell ETF shares in the secondary market. This allows the number of ETF shares to increase or decrease as needed, depending on market demand.

An ETF issuer is a firm that creates, manages and operates an ETF, establishing its strategy and working with regulators and exchanges to obtain permission to offer the fund.

ETF market price is the price at which shares of an ETF can be bought or sold on a secondary exchange, like a stock market.

Implied liquidity is the total amount of shares that you’re able to create and redeem on any given day without having to materially affect the least liquid security in that ETF’s basket.

Intraday liquidity results from ETFs trading like a stock in that they can be bought and sold anytime during the trading day at market price, which may be at a premium or discount to the net asset value (NAV), which can be helpful for investors who want more control over investment timing.

Market makers are firms that help set the market price for the ETF in the secondary market and execute client demand.

Net asset value (NAV) of an ETF is the value of the ETF’s assets, minus its liabilities, then divided by the number of outstanding shares of the ETF.

Open-ended securities are funds, such as ETFs, that do not typically have a limit on the number of shares that can be bought and sold at any time.

A secondary market is where most retail investors buy and sell securities. The most common examples are stock exchanges like the NYSE and NASDAQ but trading in this market can occur across several exchanges and market maker trades.

Scott Szever is a senior manager in ETF Capital Markets at Capital Group, home of American Funds. He has 19 years of industry experience and has been with Capital Group for one year. Prior to joining Capital, Scott worked as a director of exchange-traded products at the New York Stock Exchange. Before that, he spent 14 years at Vanguard leading various teams across the organization including six years within their ETF Capital Markets. He holds a bachelor’s degree in economics and finance from York College of Pennsylvania. Scott is based in New York.

Donald Kernizan is a senior ETF Capital Markets manager at Capital Group, home of American Funds. He has 14 years of industry experience and joined Capital Group in 2021. Prior to joining Capital, Donald worked as a senior ETF capital markets specialist at DWS Asset Management. He holds a bachelor's degree in psychology from Bowdoin College. Donald is based in New York.

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*REQUIRED FIELDS

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

Capital Group exchange-traded funds (ETFs) are actively managed and do not seek to replicate a specific index. ETF shares are bought and sold through an exchange at the then current market price, not net asset value (NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV when traded on an exchange. Brokerage commissions will reduce returns. There can be no guarantee that an active market for ETFs will develop or be maintained, or that the ETF's listing will continue or remain unchanged.

As nondiversified funds, Capital Group ETFs have the ability to invest a larger percentage of assets in securities of individual issuers than a diversified fund. As a result, a single issuer could adversely affect a fund's results more than if the fund invested a smaller percentage of assets in securities of that issuer. Refer to the applicable prospectus for details.

This material does not constitute legal or tax advice. Investors should consult with their legal or tax advisors.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

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This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.