#MyStocksQuestion

Yes, many ETFs earn extra returns by lending out stocks (securities lending) to short sellers and market makers.

It’s a common practice that can add a bit of yield, but it’s not risk-free.

Main risks:

If the borrower defaults (rare, thanks to over-collateralization)

Problems if the cash collateral gets reinvested and loses value

Operational issues with the lending program

How to check?

Look in the ETF’s prospectus, annual report, or on the provider’s website. Search for “securities lending.”

Bottom line: For most big index ETFs, the extra return is small but the risks are well-managed. Still, always check the specific fund if you’re concerned.

Worth it for most investors, but transparency matters.