Many ETFs traded below fair value during Thursday’s global sell-off triggered by worries the Federal Reserve will pull back on monetary easing, the Financial Times reports.
Discounts widened sharply on Thursday as dealers had trouble keeping up with an avalanche of sell orders, according to the article.
Emerging market ETFs were particularly affected as shares of iShares MSCI Emerging Markets (NYSEArca: EEM) traded at a 6.5% discount to net asset value, according to the FT.
However, it isn’t clear yet whether the reported discount was simply due to time-zone differences, or an operational issue with EEM. ETFs tracking foreign stocks trade in the U.S. while the underlying markets are closed. A spokeswoman for iShares didn’t immediately return a request for comment Friday morning.
EEM was trading at a discount of about 1% in early U.S. trading Friday, according to Morningstar data.