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ETF Specialist

Your Popular ETF Questions Answered

A bit of Q&A for our Morningstar subscribers.

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As analysts who deal with exchange-traded products on a daily basis, it can be all too easy to immerse ourselves in the study of very niche exchange-traded fund peculiarities. For that very reason, we often rely on you, the reader, to focus our energies. Over the past several months, we've kept a running log of the hundreds of questions that Morningstar readers, subscribers, and webinar viewers have thrown our way. While the questions span a broad range of topics--from ETF basics to tax considerations to macro portfolio-level allocation decisions--we've noticed several recurring themes. We at Morningstar really appreciate this user interaction and feedback and would like to take this opportunity to address your questions.

Can you explain the ETF market price vs. net asset value, and why there aren't the disparities you'd see in closed-end funds?
An ETF's net asset value, or NAV, is calculated by dividing a fund's total net assets by its number of shares outstanding. This is calculated at the close of trading at 4 p.m. Eastern Standard Time.

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Abraham S.H. Bailin does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.