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An ETF may trade at a premium or a discount to its NAV at any given time. Professional traders sometimes pursue trading strategies that seek to take advantage of an ETF’s premium or discount.
Low fees. The fees on both index funds and ETFs are low, especially when compared to actively managed funds. Many ETFs track an index, and this investment style keeps fees low. Since the fund ...
ETFs trade on a stock exchange during the day, unlike mutual funds that trade only after the market closes. With an ETF you can place a trade whenever the market is open and know exactly the price ...
e. An exchange-traded fund ( ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. [1] [2] [3] ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars. Many ETFs provide some level of diversification compared to owning ...
Net asset value. Net asset value ( NAV) is the value of an entity's assets minus the value of its liabilities, often in relation to open-end, mutual funds, hedge funds, and venture capital funds. [1] [2] Shares of such funds registered with the U.S. Securities and Exchange Commission are usually bought and redeemed at their net asset value. [3]
Closed-end fund shares often trade at prices that deviate from the market values of the securities in their portfolios. Such funds have a long history of trading at a discount to market value, although they may also trade at a premium. Reasons for the tendency towards discount pricing are thought to include: