ETF Valuation Question...

[MaxLD]

Let's take SMH for example. It is an exchange traded fund made up of 12 or more components. Today, some of those components are down while others are up...a normal situation I suppose. SMH is up very nicely overall, however. How then, is the value of the ETF determined? SMH is subject to bid/ask, price/volume blocks just as any individual stock. Does this mean that SMH is also subject to supply and demand pricing forces just as an individual stock would experience?

Thanks in advance for any information you can offer.

Good trades everyone...

 

[AmbushHillbilly]

SMH components are weighted.

http://www.holdrs.com/holdrs/main/i...ubAction=SMH&HoldrName=Semiconductor%A0HOLDRS

ETF's in general are pulled around by supply/demand, bid/ask spread, and liquidity issues (just like any stock). But I suspect they're quickly arb'd into line with the underlying components. I don't recall seeing a wide discrepancy, or at least one normal folks could take advantage of, between the market price and the true NAV.

 

[MaxLD]

Thanks for taking the time to sort that apart for me. Only market values are shown to me on my trading screen. Where does one locate a readout of the NAV without doing the computations longhand? Your reply suggested that you have seen the values for comparison. I'm just curious, is all.