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Looking at any ETF, they often show a rebalance interval in a fact sheet. For example, DE0006289390 shows "quarterly" there.

May the managers/administrators (or however you call the people) of the ETF change the ETF more often? Do they have fixed dates when they rebalance or is there a kind of grace period / interval in which they have to do it?

6
  • Sorry can you elaborate on exchange in question. Most ETF are electronic. Not sure about your question on rebalance... Are you asking do ETF rebalance the portfolio quarterly?
    – Dheer
    Jul 25 '19 at 14:48
  • The managers of physical ETFs have to adjust the values they hold in order to keep the tracking error low. Some say in their fact sheets that they rebalance quarterly. I am wondering if this means that they are legally bound to do so or if they can do it more often / less often. Jul 25 '19 at 15:50
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    What's a physical ETF?
    – RonJohn
    Dec 24 '19 at 18:34
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    @RonJohn I assume it refers to an ETF that does not use derivatives to construct a synthetic portfolio tracking the index, but rather owns directly the assets. It's much better approach during financial crises to own directly the assets as derivatives have a counterparty risk.
    – juhist
    Dec 24 '19 at 19:22
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    I thought Physical ETF was related to commodities ETFs like GLD where the primary asset is bars of gold in a vault rather than gold futures.
    – quid
    May 20 at 0:40
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Rebalancing of ETF or any Mutual fund would be as per what is declared in the fact sheet.

Unless there is Gross misrepresentation, regulations don't apply

0

The deadline you're referring to would be the end of each quarter, when funds release their performance data. What you often see happening is what's called "window dressing", which occurs near the end of the quarter when funds will do what they can to make their funds look better by dumping their losers and bulking up on the ones that performed well.

Here's an article that can help address much of what your question asks and explains the concept of window dressing:

https://www.investopedia.com/terms/w/windowdressing.asp

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