What are the differences between ETF price, NAV and iNAV, and why can they vary?

ETF price, NAV and iNAV are three different indicators related to exchange-traded funds (ETFs). Their main differences are as follows:

ETF price is the price at which the fund's shares are traded on the exchange in real time. It depends on market supply and demand, just like the price of regular stocks.

NAV (Net Asset Value) is the value of all the fund’s assets (stocks, bonds and other securities) minus all its liabilities, divided by the number of shares.

NAV is calculated once at the end of the trading day.

iNAV (Indicative NAV) is an approximate real-time value of an ETF’s assets, updated throughout the trading day. It is a calculation of NAV based on the current market prices of the fund’s assets, reflecting their actual value.

The ETF price can differ from NAV or iNAV due to market factors such as supply and demand on the exchange, unlike NAV, which is fixed at the time of calculation.

iNAV may slightly deviate from the actual NAV due to delays in updating asset price data, although it generally reflects the current value of the assets.

Differences between the ETF price and NAV (or iNAV) can arise from market sentiment, the fund’s liquidity or how investors value the fund at a given moment.