Meticulous market observers try to find opportunities in exchange traded funds that diverge from their net asset value. However, investors shouldn’t rely too heavily on trading around the NAV, especially in overseas markets.

An ETF’s NAV is the sum total of its underlying holdings divided by the number of shares outstanding. Since ETFs trade like any other stock on an exchange, the ETF’s price can fluctuate throughout the day. Consequently, providers update their underlying trading value, calculating the approximate NAV every 15 seconds throughout the trading day. [The Underlying Value of an ETF’s Portfolio]

The numbers are known as the intraday indicative value (IIV), indicative optimized portfolio value (IOPV) or intraday net asset value (INAV).

However, the INAV is less reliable when looking into other markets. For instance, international markets are not open in the same time zone as U.S. markets, but foreign stock and bond ETFs are still trading on U.S. exchanges. Since the INAV is taken based on the last price at which it was traded, the INAV may not move during normal hours.

In a more up-to-date example of potential diverging prices between the ETF and the NAV, Taiwanese markets close Wednesday, July 23 due to its first major typhoon of the year, reports Argin Chang for Bloomberg. Typhoon Matmo shows sustained winds of 137 kilometers per hour, or 85 miles per hour, and headed for Taiwan at 20 kilometers per hour, making landfall around midnight.

The small island is frequently visited by typhoons during the summer season, so we may see more stock market disruptions in the region ahead.