I've been pondering the question of the resilience of ETFs in panicky times. RiverNorth notes that CEFs have had a predictable disjunction between their NAV (i.e., the value of the underlying holdings) and their discount (i.e., the measure of investors' desperation of sell).
Assuming that the Total Stock Market ought to be a remarkably stable structure, I checked the latest day's performance.
VTSMX, up 8.98%
VTI, up 8.97% at NAV
VTI, up 9.10% at market price
VTI traded 15M shares on Friday, about three times its average. It also traded at a discount of 2.72%. Its 15 year average discount - capturing the last market crisis - is 0.12%. That's an imprecise estimation based on the difference between the 15 year return at NAV (7.85%) and at price (7.84%).
So if there was a
little disjunction in the super-stable then ...
For the
Vanguard FTSE EM ETF (VWO), the reported spread was 14.29%. The day's performance was either 4.87% or 7.0%, depending on what you were counting.
Hmmm ...
