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How to Navigate the Complex Landscape of ETF Discounts and Premiums

Nathan Reiff

Exchange-traded funds (ETFs) are known for being low-cost investments. The discrepancies between these prices can result in so-called premiums and discounts, which occur when an ETF is trading above or below its NAV, respectively. Sometimes, the charts reflecting premiums and discounts can make it appear as if a customer will encounter a significant change in price when transacting.