Abstract
The bid–ask spread alone does not tell the true cost of trading an exchange-traded fund (ETF). The market prices on most ETFs frequently deviate from their net asset value (NAV) because of fluctuations in market demand and supply. An investor needs to measure the true cost of an ETF trade as the difference between the fund9s current transaction price and its NAV at that point in time. Author James Angel , from Georgetown University , discusses his article, ETF Transaction Costs Are Often Higher Than Investors Realize , published in The Journal of Portfolio Management ’s Spring 2016 issue. In this article, Angel and co-authors Todd Broms of Broms Asset Management and Gary Gastineau of ETF Consultants.com offer their analysis of how and why ETF market prices deviate from their NAVs.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
