Shares outstanding - The shares outstanding of the fund are how many shares have been issued and can change daily with creations and redemptions.Intraday indicative value - This is the calculation of the most recent value of the fund based on market prices of the underlying securities.Total and estimated cash - The total and estimated cash amounts are the amount of excess cash in the fund these numbers are used to calculate how much balancing cash will be required when doing a creation or redemption.Net asset value - This is the most recent official value of the ETF based on most recent market close.There are 5 elements published daily that are involved in the valuation of an ETF: One of the keys to being transparent is publishing all the numbers required to calculate the fair value of an ETF. The structure of the ETF is based on holdings transparency. We begin with the calculation of the net asset value (NAV) of the funds and then explore discounts and premiums, cash amounts, and end with the calculation of the intraday indicative value (IIV). These are the ETFs that we are focusing on for this discussion. Most ETFs track market indexes, and are passively managed.
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It's important to understand the different types of valuation mechanisms for ETFs, the nuances of each, and how to use them to get the best execution on your ETF order.
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