Understanding ETFs

ETF premiums and discounts, explained

August 07, 2023

Two charts compare the end-of-day premiums and discounts for two ETFs from August 2018 through December 2019. The first graph shows an ETF with a premium that is relatively stable over time and averages 18 basis points. The second ETF is relatively volatile, shifting from premium to discount repeatedly and ending with an average premium of 0 basis points, a deceptive indicator.


David Sharp
Patrick Hooper
Vanguard Information and Insights

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