I am considering investing in Exchange Traded Funds (ETFs) and I am wondering if they typically trade at a discount to their Net Asset Value (NAV). I want to understand if buying ETFs at a discount is a common occurrence.
5 answers
TaekwondoPower
Thu Jan 02 2025
Market prices are influenced by the forces of supply and demand.
IncheonBeautyBloomingRadianceGlow
Thu Jan 02 2025
Due to these market dynamics, an ETF's market price can vary from its NAV.
Skywalker
Thu Jan 02 2025
When there is a significant demand from buyers, the ETF's price can rise above its NAV. This situation is known as a premium.
SoulStorm
Wed Jan 01 2025
Conversely, if there is substantial sell-side pressure, the ETF's price can fall below its NAV. This occurrence is termed as a discount.