ETF Question


Are the price of ETFs driven only by the value of their underlying holdings, or are they also subject to demand?

Put another way, say you have two ETFs. The ETFs are exactly the same (underlying holdings, expense ratios, anything else you can think of). The single difference between the two is that the first is very well known (discussed on all the forums, talked about it the media). The second ETF is less well known and is not on top of people's minds to the same degree.

Could a higher demand for ETF #1 cause that ETF to trade at a higher value than ETF #2, everything else being equal?

Or is it that buying either one of the ETFs puts demand on the underlying holdings, raising their value, which would simultaneously raise both ETFs' value.


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