This increases the volatility of a leveraged fund's net asset value, compared with an unleveraged peer.
In other words, closed-end funds typically do not have sales-based share classes with different commission rates and annual fees.
[12] This feature could in theory lead to potential arbitrage profits if the market price of the ETF were to diverge substantially from its NAV.
Since the market downturn of late 2008, a number of fixed income ETFs have traded at premiums of roughly 2% to 3% above their NAV.
Closed-end fund shares often trade at prices that deviate from the market values of the securities in their portfolios.
[9]: 86 The Herzfeld Closed-End Average traded at a discount to net asset value during most of calendar year 2022[22] and all of 2023,[23] according to the American weekly financial newspaper Barron's.