Bond ETF Notes
by dd on Nov.13, 2008, under bond etf
NAV vs. Actual Price
The NAV is the *estimated* value of all the assets the ETF holds. NAV is priced throughout the trading day.
The actual price of the ETF is what it sells for on the stock market. The difference between NAV and actual price can vary (premium or discount). The ETFs are *supposed* to have minimal variance between NAV and actual price (unlike closed-end mutual funds).
Big discounts can occur if there is a lack of liquidity of the underlying securities.
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