This ETF is different from traditional ETFs.
Traditional ETFs tell the public what assets they hold each day. This ETF will not. This may create additional risks for your investment. Specifically:
- You may have to pay more money to trade the ETF's shares. This ETF will provide less information to traders, who tend to charge more for trades when they have less information.
- The price you pay to buy ETF shares on an exchange may not match the value of the ETF's portfolio. The same is true when you sell shares. These price differences may be greater for this ETF compared to other ETFs because it provides less information to traders.
- These additional risks may be even greater in bad or uncertain market conditions.
The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF secret, this ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF's performance. If other traders are able to copy or predict the ETF's investment strategy, however, this may hurt the ETF's performance.
For additional information regarding the unique attributes and risks of this ETF, see the additional risk discussion at the end of this material.
Figure 1 shows a trade in American Century Quality Diversified International ETF (QINT), an international equity ETF. At the time this trade was executed, QINT had a 30-day ADV of 11,737 shares, which is well below the block trade of 196,269 shares for a total value of $10,017,570. As you can see, the trade was executed at $51.04, at the ask price. So, with the help of the block desk, the buyer was able to capitalize on the underlying securities that were not visible on the secondary market.