Sponsor

Definition of 'Sponsor'


1. In the context of stocks, an influential investor who creates demand for a security because of their positive outlook on it.

2. In the context of mutual funds, an underwriting company that offers shares in its mutual funds.

3. In the context of exchange-traded funds (ETFs), the fund manager or other entity who files the needed regulatory materials with the SEC to create an ETF. The sponsor also solicits and approves an authorized participant to create and redeem ETF shares.

Investopedia explains 'Sponsor'


1. Many investors look for wide sponsorship in a stock before investing, believing that the endorsement of well-known investors add a measure of safety to their investment decisions.

2. An underwriter must sponsor a mutual fund issue for investors to have access to it.

3. The sponsor of an ETF is essentially the managerial body of the ETF and brings together the needed parties and regulatory framework to establish the ETF.



comments powered by Disqus
Hot Definitions
  1. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  2. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  3. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  4. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  5. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
  6. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
Trading Center