FYI: Securities lending is a fairly simple process that can generate extra returns for ETF investors, but it also introduces extra risk—however minimal.
The logic behind securities lending is this: An equity ETF will typically hold thousands of shares of various stocks. If there is a short-seller out there who wants to borrow those stocks—and agrees to post collateral and pay the ETF a fee for doing so—why not lend them out and make a little extra dough?
Regards,
Ted
http://www.etf.com/sections/features-and-news/etf-education-understanding-securities-lending
