What is a securities lending policy in ETFs?

Many ETFs engage in securities lending, where the fund lends some of its holdings to borrowers (often for short selling) in exchange for fees. The fund may share lending revenue with shareholders, which can slightly improve net returns.

Securities lending introduces additional considerations like collateral management and counterparty exposure. Policies vary by issuer, including how much of the portfolio can be lent and how revenue is split.

If you're comparing ETFs, check whether the issuer discloses lending revenue and their policy details. It's usually a small return contributor, but it can matter when two funds are otherwise very similar.