Does anyone know how, say Blackrock, issued ETFs on illiquid assets can unravel? 1. People lose faith in it's convertibility or issuer 2. It starts to trade at a discount to underlying assets 3. People attempt to convert the ETF back with Blackrock, who can't b/c illiquidity?
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large investors can trade in-kind baskets via authorized participants. individuals really can't do that. but hadn't thought much about an ETF that trades at a discount and an investor does an in-kind redemption, acquiring the securities at NAV vs selling the ETF shares at a disco
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