Creation/redemption is the fundamental mechanism that keeps ETF prices in line with their constituents. How it works for a normal ETF is there is a group of pa

Creation/redemption is the fundamental mechanism that keeps ETF prices in line with their constituents. How it works for a normal ETF is there is a group of participating brokers (basically all the big banks usually) who have the right to create units by handing in the constituents of the basket and the corresponding right to redeem units for the constituents. This keeps the price within some bounds.