ETF Market Price, NAV and iNAV Explained

Zerodha Fund House • 2 days ago

Original source

What This Video Is About

This video discusses the pricing of Exchange-Traded Funds (ETFs) and how to determine if the price is fair. It highlights the three different values associated with each ETF unit: Market Price, Net Asset Value (NAV), and Indicative Net Asset Value (iNAV).

Major Ideas Discussed

  • The Market Price is the price at which an ETF is bought or sold on an exchange.
  • The NAV is the actual value of the fund's assets, calculated at the end of each trading day.
  • The iNAV is the current market value of the assets, updated during market hours.
  • Supply and demand are the main factors affecting ETF prices.
  • Comparing the Market Price with the iNAV helps investors determine if the ETF is trading at a premium or discount.
  • Investing at a premium means paying more than the ETF's actual value, while investing at a discount means buying it for less than its actual value.

What to Watch Next

Investors should monitor the iNAV and compare it with the Market Price before making investment decisions, considering the potential risks and benefits of investing in ETFs.