How is the net asset value and market price of an index ETF linked?
The price of an index ETF typically resembles, but is independent of, the underlyingnet-asset-valueof the fund. Unlike closed-end ETFs, the shares for an index ETF can be created or deemed on a daily basis by marketspecialists. If the specialist is not maintaining an orderly market in a fund, and institution can exchange shares in-kind (in 50,000 share lots) to minimize any price to net asset value gap.
The price of an index ETF typically resembles, but is independent of, the underlying net-asset-value of the fund. Unlike closed-end ETFs, the shares for an index ETF can be created or deemed on a daily basis by market specialists. If the specialist is not maintaining an orderly market in a fund, and institution can exchange shares in-kind (in 50,000 share lots) to minimize any price to net asset value gap.
