Many ETFs seem to be trading at a big premium or discount to their benchmark. Please keep these things in mind before buying and selling ETFs.
Whenever there are sharp moves in the markets, ETFs can trade at abnormal premiums or discounts. Here are a few ETFs for example.
Two numbers to look at whenever you are buying and selling ETFs
When you are buying and selling ETFs, you need to look at two numbers:
- The price
- The iNAV or Intraday Net Asset Value of an ETF
The price is what you see on Kite. This is influenced by market movements, demand, and supply.
What is iNAV?
The iNAV (Indicative Net Asset Value) is the value of the underlying shares in an ETF. Think of it like the fair value of an ETF. You can see this both on Kite and on the AMC websites.
To add iNAVs to your Kite marketwatch search for “ETF Name NAV”
To learn more about how ETFs work, check out this chapter on Varsity: