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ETF Specialist

Navigating ETF Premiums and Discounts

What is net asset value? Why does it matter? And how can you ensure that you are buying and selling ETFs at a fair price?

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A version of this article was published in the July 2016 issue of Morningstar ETFInvestor. Download a complimentary copy of ETFInvestor here.

The exchange-traded fund marketplace is littered with a variety of terms and acronyms that have left many investors in want of a user's manual. From time to time, it is worth going back to basics to better understand the ins and outs of ETFs' mechanics to help investors use them to their best advantage. Here I will discuss net asset value: what it is, why it matters, and how to make sure you are buying shares of an ETF at a fair price.

Ben Johnson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.