What it is
A discount to NAV means the market price of an ETF's shares is lower than the total value of its underlying assets, minus liabilities, on a per-share basis. This situation often arises when investor demand for the ETF itself is lower than the supply of shares available on the secondary market. For closed-end funds or trusts that cannot create or redeem shares easily, discounts can persist and widen, reflecting a disconnect between market price and intrinsic value.
For crypto trusts, such as the Grayscale Bitcoin Trust before its conversion, persistent and significant discounts to NAV were common, sometimes exceeding 40%. The discount reflects a divergence between the market's perception of the fund's value and the actual value of its holdings. The ability of an ETF to create and redeem shares helps to keep its market price closely aligned with its NAV, but discounts can still appear, especially in volatile markets or during periods of low liquidity.
Why it matters
A discount to NAV means you could buy the fund's underlying assets for less than their direct market price, offering a potential value opportunity.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice