sponsor

spon·sor   (spŏn'sər)    n.   One who assumes responsibility for another person or a group during a period of instruction, apprenticeship, or probation. One who vouches for the suitability of a candidate for admission. A legislator who proposes and urges adoption of a bill. One who presents a candidate for baptism or confirmation; a godparent. One that finances a project or an event carried out by another person or group, especially a business enterprise that pays for radio or television programming in return for advertising time. tr.v.   spon·sored, spon·sor·ing, spon·sors To act as a sponsor for. [Late Latin spōnsor, sponsor in baptism, from Latin, surety, from spōnsus, past participle of spondēre, to pledge; see spend- in Indo-European roots.] spon·so'ri·al (-sôr'ē-əl, -sōr'-) adj., spon'sor·ship' n.

sponsor  (n.)

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 Commentary

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.

Related Links

Mutual Fund Basics Tutorial
Introduction To Exchange-Traded Funds
Three Kinds Of Analysts And What You Need To Know About Them
An Inside Look At ETF Construction

See also: Authorized Participant, Exchange-Traded Fund, Mutual Fund, Redemption, Underwriting

sponsor

1. An institutional investor or a brokerage firm that has a position in a security and influences other investors to establish a position in that security.

2. See underwriter.

Main Entry: spon·sor
Function: noun
1 : a legislator who introduces and supports a legislative proposal (as a bill or amendment)
2 : a person who assumes responsibility for some other person (as an immigrant) or thing
3 a : one that securitizes assets b : one that promotes, advocates, or favors a business venture (as investment in a security or limited partnership) —sponsor verb —spon·sor·ship noun

sponsor

one who stands surety for another in the rite of Christian baptism. In the modern baptism of an infant or child the godparent or godparents make profession of faith for the person being baptized (the godchild) and assume an obligation to serve as proxies for the parents if the parents either are unable or neglect to provide for the religious training of the child, in fulfillment of baptismal promises. In churches mandating a sponsor only one godparent is required; two (in most churches, of different sex) are permitted. Many Protestant denominations permit but do not require godparents to join the infant's natural parents as sponsors. In the Roman Catholic Church godparents must be of the Catholic faith.

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