Several major foreign index analysis before the article mentioned that the venue should pay attention to the premium to buy index funds.
If you buy in the premium is too high, you lose out.
Today to explain in detail the issue premium, the premium is mainly produced in the venue when buying ETF's, we start to understand under ETF.
01
ETF, namely exchange-traded index funds.
It is a special kind of index funds, the most important feature is trading at brokerage software, you can buy ETF shares like buying and selling stocks that.
Like ordinary index funds, ETF can purchase and redemption. But the purchase is too much trouble, but the threshold is high.
For example, if you want to purchase on the card 50ETF, according to the fund company reported requisitions, purchase the appropriate number of shares, to take stock exchange ETF funds.
Requisitioning units from one million copies.
So ETF investment in two ways, first purchase from the fund company, the high threshold; the second is to buy from the hands of other investors.
So the premium is how to generate?
02
Two different generation and related ETF's premium investment, which brings the price of two indicators: NAV and the trading price.
Net purchase to purchase, purchase price of the transaction places to buy.
When the transaction price is greater than the net, it creates a premium. In contrast, the discount is less than the net value of the transaction price.
As the price will always change during trading hours, while net to wait until after the market close, fund companies can be calculated.
Buy ETF trading hours, how to determine whether the premium it?
This is the need to look at IOPV value of the ETF, IOPV estimated net value of the real-time calculation of the exchange for investors, as shown below:
Reference net 15 seconds to refresh, if the transaction price is greater than IOPV, premium appears.
General stock trading software or mobile phone APP can be found IOPV, some may not, but the premium rate will be marked words, before buying ETF you want to view.
03
And compared to the domestic ETF, QDII type of ETF is more prone to high premium. The reason is more complex, but I think there are two main reasons.
The first reason is to limit the amount of foreign exchange, foreign exchange quota if the fund runs out, the OTC Fund will suspend the purchase.
The influx of investors to buy the venue ETF, thereby pushing up the price of the transaction, resulting in a premium.
The second reason is the different trading hours. US stocks to Nasdaq for example, were inside the Nasdaq ETF, the fund is often at a premium.
The domestic stock market opened at 9:30, the Nasdaq ETF began trading, at a time when stocks have not opened yesterday IOPV lost the reference value.
Investors tend to look at the performance of the Nasdaq 100 index futures, as shown below:
Left is the Nasdaq 100 futures, Nasdaq ETF is the right trend, time is March 13 on Friday.
As can be seen, the Nasdaq 100 futures quickly pulled after 12:00, and 13:00 pm after opening the Nasdaq ETF also rose.
Investors expect stocks to rise in the evening, the Nasdaq ETF prices pushed to produce premium.
Therefore, in order to avoid high premiums, resulting in unnecessary losses, off to buy QDII fund is a good choice.
Disclaimer: This article is only the author's personal record investment analysis and does not constitute investment advice.
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