I will buy the Vanguard Ftse All-World Units Etf A through my bank on Borsa di Milano (the Italian Stock Exchange). I have been told by the financial advisor of my bank that these assets have a small ADV on the Italian Stock Exchange and that therefore I should worry about liquidity. But I have also been studying by myself, for example here, where it is stated that the liquidity of the ETF on the secondary market is only a small fraction of the real liquidity of the ETF, because an Authorized Participant (AP) can redeem and create quotes. But who are they precisely in Italy and Europe? If many years in the future I want to sell my ETF, but for some reason it is no more exchanged on the Market, who will be there to redeem my quote? Could you please shed light on my questions and/or provide some resources where I can understand the issue.


Looks like this is related to Bid/Ask spead for an ETF?

As long as a fund is active, there should be one or more authorized participants who will buy your shares if there wasn't a deep enough secondary market to handle your order.

It is technically possible for all active participants to leave an ETF. It's unlikely, because the AP business is profitable, so if one AP leaves another will step up to take their place. Without any APs an ETF may trade like a closed-end fund w/the potential of larger market/NAV spreads. This isn't something I've seen happen with equity funds tracking broad indexes.

Should the ETF shut down (usually due to lack of investor interest/assets), it will liquidate and return the funds to investors. You'd get notice of this well before it happened and you could choose to sell the fund beforehand or wait for Vanguard to return your cash.

These resources are primarily focused on US domiciled funds, but the concepts hold true for UCITS registered products.



  • This question is indeed very related with "Bid/Ask spread for an ETF". I conceived them as separate because in "Bid/Ask spread for an ETF" I ask specifically about the secondary market, while here I ask for the role of APs. The relation became more clear to me only a posteriori. In my opinion though it makes sense to keep this two questions separate.
    – MrRobot
    Jan 23 '21 at 17:59
  • Rather than worry about the APs, I would check to see if Vanguard was involved in listing the ETF on the Borsa. Did Vanguard or a third party list the ETF on the Borsa? If it was a third party, I would avoid it. Jan 27 '21 at 6:42
  • The ETFs are listed on the official Vanguard sites for Italy and for Germany (as they are also traded on the Deutsche Börse), and the ISIN and WKN codes are indicated. Therefore I think that they have been listed by Vanguard.
    – MrRobot
    Jan 29 '21 at 22:21

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