I’m looking to invest a few thousand dollars in some ETF’s that yield a good dividend. I know that if it sells at a premium, it is above the Net Asset Value, and if it sells at a discount then it is below NAV. Which one is better in terms of value and potential growth?
Typically, ETFs are priced very close to their NAV, so it’s not so much of a factor. It’s almost always better to buy at a discount to the NAV if the situation presents itself.
Think about it, you’re getting, say, $100 worth of stock for $98. What’s not to like?
-lv
You would generally be making a value play by buying at discount. You would be buying into an investing style or market sector that is out of style at the time. A momentum investor would likely be buying at a premium. If you are looking to buy and hold I would look for a well designed and manged fund selling at a discount.