Exchange-traded funds (ETFs) offer investors an efficient means of accessing a professionally managed portfolio of securities through a single investment vehicle. While ETFs share this and many other features with mutual funds, the process of buying and selling ETF shares is different.

Similar to trading a stock, investors can buy and sell ETF shares on a national stock exchange at a market price that can change throughout the day. These trades occur on the secondary market.

New shares of an ETF are created when an ETF sponsor, such as Dimensional, and an approved financial institution, referred to as an Authorized Participant (AP), transact in the primary market. When there is high demand for ETF shares, an AP can request new shares from the ETF sponsor in exchange for securities and cash. To redeem shares of the ETF, the AP can deliver ETF shares to the ETF sponsor in exchange for securities and cash. This plays an important role in balancing the supply and demand for shares of an ETF.

‍