The iShares MSCI Philippines ETF (NYSEArca: EPHE) continued to trade in the U.S. on Tuesday even though the fund’s underlying stock market was closed for the second straight day as heavy rains intensified flooding in the Philippines.

EPHE was down 1.5% on Tuesday morning. Also, the Philippines ETF was trading at a discount of more than 4% to indicative value, according to Morningstar.

However, this discount is to be expected because the fund is still trading while the Philippines stock market is closed. It comes down to price discovery and the fact that investors are positioning the market will trade lower when it reopens.

At least eight people were killed as heavy rains flooded the Philippine capital and nearby provinces, Bloomberg reports.

“President Benigno Aquino suspended work in government offices in Manila for a second day, prompting Bangko Sentral ng Pilipinas and exchanges to keep currency, bonds and stock markets closed,” according to the story.

EPHE holds about $373 million of assets. The fund saw above-average trading volume on Tuesday for the second straight session.

iShares MSCI Philippines ETF

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