Q: TCSH ETF is classified as a money market product. I understand that the NAV will usually increase until the monthly distribution near the end of the month. What I don't understand is why this ETF always seems to trade at a price much higher than the actual NAV. I thought all money market ETF's would trade very close to NAV price.
5i Research Answer:
The current premium over NAV is 0.096%, which we really would not consider that 'high'. Indicated yield is 2.63% so even if one buys at the premium and sells at NAV, indicated yield becomes 2.53%, which is still competitive to other offerings. Premiums/discounts on ETFs just come with the territory, as supply/demand does play a role unless the market maket redeems/creates new units.