Understanding Flaws in ETF Data

Hougan, Matt
June 2011
Journal of Financial Planning;Jun2011, Vol. 24 Issue 6, p36
Academic Journal
The article discusses the flaws in the data of the exchange-traded funds in the U.S. The author states that in stock charts the impact of dividends and distributions are ignored since it is difficult but the ETFs have made it easy to chart investments like bonds where dividends represents the entire story. He also states that premiums and discounts in the ETF data is misleading since its net value asset (NAV) may be either over or undervalued unlike the mutual funds. He states that the U.S. Securities & Exchange Commission (SEC) requires every ETF issuer to publish an estimate of the ETFs fair value every 15 seconds of every trading day since it is important for investors. He stresses that by examining these flaws can lead into the true benefits of ETFs.


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