Specifically, when looking up an ETF, the ETF’s price may diverge from its intraday net asset value, or iNAV, which is typically updated every 15 seconds and should closely approximate the net asset value of an ETF throughout the day. Consequently, an ETF can trade above or below its iNAV, or also known as a premium or discount to its underlying portfolio’s value. If one is buying an ETF at a premium, an investor is essentially paying more than what the underlying basket is worth, or if one is buying at a discount, an investor is getting a deal over the NAV.
“Suspending share issuance inhibits specialized market makers, called authorized participants, from keeping ETF prices in line with the value of their assets. Investors can still buy and sell shares, though heavy demand can drive the ETF’s price to a premium over the indexes’ value,” according to the Wall Street Journal.
To this point, GCC’s on-screen price has not deviated wildly beyond its NAV.
For more information on ETFs, visit our ETF 101 category.