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© Howard Bryan Bonham

Kirk's Market Thoughts

  1. pbradford6


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1.   Aug 26, 2007 10:00 AM

» pbradford6 - ETF liquidation


Kirk

During the recent extreme market volatility, is there a danger when selling an ETF during a sharp drop that the ETF's NAV will be severely mis priced? For example, if the market is rapidly loosing value (400 point down day), would the investor take a haircut selling into this panic by having his ETF completely mis priced? Is there any way to track this difference between the quote and the actual NAV before selling?

Fortunately, I didn't do any selling into this decline but still wondered how fairly prices of ETFs represented the underlying stocks. It would seem that a traditional mutual fund wouldn't have this problem assuming he/she wanted to sell at the end of the day.

Thanks

-- posted by pbradford6


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