What are the benefits of Securities Lending? What are the drawbacks?
Some potential benefits of securities lending
The benefit of Securities Lending is the interest payments, which are typically paid each month by the borrower to the lender.
The lender (in this case, the Stasher) earns this money, on top of owning the investment. They can sell the security at any time and their portfolio stays the same.
Some potential drawbacks of securities lending
While the securities are being lent, the lender waives voting rights. The lender may receive payments in lieu of the dividend, however, those investments may not be covered by SIPC protection.
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