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International ETFs trading at a premium: What investors should check before buying
CNBC-TV18 1 hr ago·28 Sept 2026, 3:27 am
India-listed international ETFs often trade at a premium to their actual asset value. This happens because the local listing price is influenced by high demand from Indian investors, which can drive the price above the net asset value of the foreign assets. While this can make the ETF look attractive, it reduces the actual returns you receive compared to buying the underlying assets directly.
For investors, this premium acts as a hidden cost. If you buy at a premium, your effective entry price is higher, meaning you earn less when the fund's value rises. It is crucial to check the current premium/discount level before investing. A significant premium can erode your gains, while a discount offers a potential opportunity to buy the basket of foreign assets at a lower price.
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