Why MON100 is trading around 10% higher than NAV?
These ETFs cant create new units due to RBI restrictions.
It is not just the ETF, Motilal Oswal Nasdaq 100 FoF is also trading at a premium (last 7 days return is 11% while Nasdaq 100 has moved up by ~1% and currency is almost flat) . While we can compare the ETF price with iNAV and conclude if the ETF is overpriced or not, there no such comparison available for a FoF. A lot of people will be investing in FoF without realising that they are overpaying by around 10% compared to the value of securities held by the FoF.
You have got it reversed. FoF is not trading at premium. FoF doesn’t even trade 
This particular FoF invests in underlying Nasdaq 100 ETF. So as an investment it is only holding ETF units.
As ETF units have started trading at premium, value of holding of FoF has increased and hence the jump in NAV.
You don’t need a separate comparison for this. FoF is investing in ETF → and you know ETF is trading at premium to iNAV, so … it is self evident.
Yes, technically correct as per the fund documents. But as an investor I am not looking to replicate MON100 returns but Nasdaq 100’s return in INR. (And other FoFs / index funds tracking nasdaq 100 offered by other AMCs like Kotak and ICICI are doing just that even for the last 1 week).
No, it is not self evident. FoF can choose to directly purchase new units of the ETF from the fund house instead of buying them at LTP from open market. In such a case even if the LTP is at a premium to iNAV, the FoF would be getting the units at iNAV. Unfortunately for now, since the creation of new units has been stopped, FoF is forced to buy MON100 units at jacked up LTP.
In any case, my point is still that wrt value of Nasdaq 100 holdings, the NAV of the FoF is “quoting” at 10% premium and many investors will not be aware of this. (I did not mean “trading” literally but my apologies if that caused confusion).
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How FOF buys is immaterial in this case.
Even if FOF does not buy any fresh units (assuming there is no infllow), its NAV is still going to go up. Because NAV is calculated at traded price.
FoF hold unit of ETF as its holding. As ETF units price shoots up NAV also shoots up proportionately.
So even if there i no new inflow, NAV will continue to rise in proportion to ETF traded price.
Most likely because thy are not following the ETF route and also in that case they would have stopped taking new subscription.
So it is devil’s choice, if you want to continue investing, buy ETF / FOF at premium or you get a index fund which is tracking well, but not allowing fresh buying.
SEBI has introduced artificial constraint and these are its repercussion.
Then you should not be investing in this FoF as your objective and scheme’s objective are not aligned
Below is snip from’ fund’s website on it’s investment objective.
Curious - Nasdaq 100 is 4.4% down from ATH, whereas MON100 is 20% down from ATH. Reason?
Hi Meher_Smaran
So what is your advice? is deepak shenoy right? We should not buy Mon 100 etf? Pl clarify ?
You can, as long as it’s trading at par or at a small premium to it’s INAV.
Always compare the INAV of the ETF with the current market price, to know if the ETF is trading at par or premium or discount, and then make your decision.
Right now, MON100 seems to be trading close to its INAV (at par).
However, MAFANG ETF is trading at around 18% to 20% premium.
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Where are you guys seeing the iNAV for MON100. I am not able to search it on motilal website
Does anyone know why there’s such a huge difference in the premium between MON100 & MAFANG? The RBI restriction should affect both, right?
In MAFANG, one can only place sell order, though both possible in MON100.
Why ,same question.
Price and premium are simply decided by demand for the product (as supply is constrained). Simple explanation should be that one iss in more demand then other by investors.
That should not be the case. Maybe some technical glitch or some additional restriction by your broker.
MON100 rose much higher than Nasdaq, and was trading at a premium to actual price. Now it is coming near to its actual price.
That’s the textbook answer. 
Just feel there’s something more to it in this case…
Noticed the same with two brokers, including Zerodha, though it was fine the next day.
It is because of the inability of the market makers to create fresh units to sell in the market, to control this premium.
Mirae Asset Mutual Fund (Mirae Asset MF) has cautioned investors looking to purchase units of its overseas exchange-traded funds (ETFs), noting that these ETFs are currently trading at a premium
This is due to restrictions on market makers, which prevent them from buying fresh ETF units from the fund house and selling the same on the exchanges.
There was still some room left for market making, which eventually got exhausted in March 2024, as notified by Mirae Asset MF
Not sure how the market makers of MON100 were able eliminate this premium and bring the ETF close to its INAV, While MAFANG can’t.
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Is MON 100 ETF still trading at a premium to its NAV ? Pls guide
You can check the iNAV on Kite.
So the premium now seems to be deminimus