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Let's say I have bought participations in a mutual fund in euros, but the fund's underlying assets are in US dollars (e.g. a fund that tracks the S&P 500 but that is offered in euros).

At some point I decide to sell my participations. Can I request to receive the money in US dollars instead of euros? Can I request to receive my inversion's underlying securities (that is, the stocks and bonds that correspond to the amount of money I have invested)

Do the above questions' answers apply to ETFs in an identical way?

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  • For an ETF (but not a trad fund) IF you are an Authorized Participant -- that is, a financial institution that is a member of your country's securities clearing system(s), which requires very extensive regulatory compliance that probably costs tens of millions of dollars a year -- AND you hold at least one Creation Unit of shares, usually a few hundreds of millions of dollars worth, THEN you can redeem with the fund for the underlying (portfolio) securities in-kind. See the prospectus and consult your lawyers, accountants, and system implementors (you'll need several of each on staff). Apr 24, 2020 at 7:26

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If the fund is offered in euros, you will receive euros when selling the fund. The fund manager converts the money from the sold securities from dollars to euros, trying to get a rate that is as close to the rate at the time the value of the fund for the day was calculated.

Anything else would not be possible because the calculations are done in euros. The fund manager is obliged to pay you money using the official calculations -- how many units sold, what is the price per unit in euros.

You also typically cannot receive the individual securities related to the sale. I say "typically" because there are quite many countries having mutual funds, and each country may have different laws, so this might not apply universally.

You can, however, buy dollars immediately when selling the fund. Nothing guarantees you get the same conversion rate that the fund manager used. Similarly, you could also buy immediately the individual securities, but also here nothing guarantees you get them for the same price.

ETFs do not have a currency they are offered in; ETFs have a stock exchange they are traded in. That stock exchange has some official currency. It's this currency you will get when selling the ETF. So, if you are lucky enough to find an European ETF in a US stock exchange, you could theoretically receive dollars when selling the ETF; of course if this happens, you probably bought the ETF using dollars in the first place.

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