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How is an Ondo Intelligent Portfolio different from an ETF?

An ETF is a fund. When you buy one, you buy shares in a pooled investment vehicle that is registered, sponsored, and administered under a fund regime, and that trades on a listed exchange. An Ondo Intelligent Portfolio is not a fund and is not exchange-listed. You are not buying shares in a fund, and there is no fund manager, fund administrator, or fund custodian standing behind your position in that capacity.An Ondo Intelligent Portfolio token is not an ETF. The token is fully backed by a weighted basket of Ondo tokenized stocks and ETFs (together with any cash in transit). You mint and redeem it directly with the Issuer rather than buying it from another investor on an exchange, and you can transfer it peer-to-peer onchain, subject to certain transfer restrictions.A few practical consequences of that difference:
  • There is no primary-market intermediary. ETF creation and redemption runs through authorized participants in large fixed-size blocks. With portfolio tokens, any eligible investor can mint or redeem directly with the issuer.
  • You can hold fractional amounts. ETF shares trade in whole units on exchange; Portfolio tokens can be held and transacted in fractional amounts.
  • The fee is charged differently. ETFs charge an expense ratio at the fund level. Each Ondo Intelligent Portfolio charges an annual service fee that accrues daily and is reflected in the token’s value. There is no separate charge and nothing to pay directly.
  • Distributions are handled differently. Many ETFs pay dividends out to shareholders. Ondo Intelligent Portfolios are total return trackers: dividends on the portfolio’s holdings are reinvested back into the portfolio assets (net of applicable withholding taxes) and reflected in the token’s value over time.
Some Ondo Intelligent Portfolios hold tokenized ETFs among their underlying assets. That does not make the portfolio itself an ETF.

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How is it different from holding Ondo tokenized stocks individually?

Portfolio tokens are built on the Ondo Stocks platform, and each constituent is itself an Ondo tokenized stock/ETF that can be minted and redeemed against traditional market liquidity. Every Ondo Intelligent Portfolio is backed by the same tokenized stocks and ETFs that are available individually on the Ondo Stocks platform, invested according to a professionally-constructed target allocation. The difference is the packaging and the maintenance.Building the same exposure yourself would mean sizing and minting each position individually, tracking how the weights drift as prices move, and trading back to target on your own schedule. With a portfolio token, one mint gives you the whole basket, and the portfolio is designed to rebalance back to its base weights approximately every quarter without any action from you.Two things do work differently from a single-asset token, and they follow from the fact that a portfolio is a basket rather than one security:
  • Availability depends on the whole basket. If any constituent asset is closed for trading, minting and redemption are paused for that portfolio until the full basket is open again. Mint/redeem availability for single-asset Ondo stock tokens only depends on its own underlying asset.
  • The token price will not match the price of any one underlying asset. The displayed price is the per-token value of the portfolio, calculated from the weighted basket value of the underlying portfolio assets, not the price of any single stock in it.

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How else are Ondo Intelligent Portfolios different?

A few other key differences between Ondo Intelligent Portfolio tokens and some other tokenized basket or index token implementations are that our assets are: