It should be noted that the NAV of funds that distribute dividends tend to grow when dividends are being paid out and will drop when the ETF holders are paid. The adjusted NAV of ETFs that reinvest the dividend is less critical to performance analysis.
Investors who need precise, up-to-date information during the day should use the intraday net asset value (iNAV) – a measure of the continuous real-time, fair-value of an ETF calculated by Deutsche Boerse. The iNAV is available at any data vendor, including Google Finance, where it can be located by typing “.iv” after the ticker of any ETF. The iNAV provided added transparency, credibility and valuation of a fund in real time to investors. It is suggested to compare the bid/ask price to the iNAV to see if an ETF is being priced fairly.
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.