Creation unit

The minimum module for issue or redemption of shares in an open exchange-traded fund (ETF) , usually between 25,000 and 300,000 fund shares, depending on the fund´s policy. Existing ETFs issue their shares in return for portfolio deposits of securities in multiples of the creation unit basket specified by the fund´s advisor. With minor exceptions related primarily to accrued dividend payments and cash balancing amounts, creations and redemptions are in kind, not in cash. ETF trading on the secondary market on the exchange is in the individual fund shares issued in the creation, not in Creation Units.