What is replication?Replication

How an ETF tracks its index: physical replication buys the constituents; synthetic replication swaps for the index return with derivatives, adding counterparty risk.

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Indexes & ETFs
How to Choose an ETF
There are often several ETFs tracking the same index. Compare fees, tracking difference, fund size and bid-ask spread, and work out which is cheaper for long-term holding vs. frequent trading.

Related terms

spread
index
expense ratio
tracking error
AUM

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