Measure
Premium and discount to NAV
Definition
The gap between an ETF's market price and the value of its underlying holdings.
How to read it
Creation and redemption by authorised participants normally keeps the gap small for liquid funds.
What it does not tell you
The mechanism weakens exactly when it matters. In funds holding assets that trade in another time zone or in stressed credit, the quoted NAV may be stale, so an apparent premium can be the price telling the truth first.
Applied in 6 articles
6- Premium and Discount to NAV: What It Means When an ETF's Price Drifts From Its Holdings
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- The Honest Math of Leveraged ETFs: What Long-Horizon Investors Need to Understand Before Holding 2x or 3x
- Grid Modernization and the GRID ETF: A Calibrated Look at Smart-Grid Equipment vs. Utilities
- SGOV's Role in a Long-Term Portfolio: Yield, Realized Risk, and the Cash Floor
Every figure computed with this measure on this site follows the conventions set out in the methodology. All measures →