Wednesday, December 29, 2010

Premium to NAV

The concept Premium to NAV refers to when an ETF or closed-end mutual fund is trading at a price per share that is higher than the NAV per share. Significant variance between NAV and the unit price is rare on ETFs because of the ease of arbitrage, but may persist on closed-end mutual funds due to investor supply-demand imbalances.

Synonyms: Discount to NAV

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