Why is this ETF (UTI SUNDER) trading at such a steep discount to its NAV?

I was able to buy 50 units at 421.05 today.

The NAV according to UTI's site is currently above 474.

http://www.utimf.com/product_service...pup.aspx?id=27

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What is the NSE code of this ETF for buying?

Money control it shows 474 though
http://moneycontrol.com/mutual-funds...-sunder/MUT050

have you added in your portfolio ?

here are UTI SUNDER's NSE details:

http://nseindia.com/marketinfo/equit...ries=EQ&flag=0

not really a portfolio pick.

more of an arbitrage play.

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is this the code
UTISUNDER - EQ ?

UTISUNDER is the code and EQ is the series in which the stock (ETF) is traded.

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If we want to trade ( ETF) should we buy in -EQ or -BL?
There are two codes on nifty?

in EQ Series.

The tick size is 1 paisa and not 5 paisa as with other stocks.

I have placed a sell order at 458.49.....

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Sometimes people do weird things in the markets.

UTI SUNDER is an ETF and each unit is approximately 1/10th of the Nifty.

If the Nifty is trading at 4600+ levels, the NAV of UTI SUNDER has to be around 460.

Still someone sold units of this ETF at as low as 365 today.

I wonder if it was a typing error and that person actually wanted to place an order at 465....

Even on 14th August, the price had gone to as low as 377.15 on the NSE.

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I know now...why this stupid ETF trades at a steep discount to the NAV.

There is just no market for it.

I bought 50 units at 421.05.

In 2 days, I have been able to sell 7 and 29 units at around 455.

I am still stuck with 14 units.

There are just no buyers for this ETF.

If I give an order to sell 100@market, I will end up selling at a 6%-8% to the LTP.

I hope I can get rid of the remaining 14 units tomorrow at a price higher than 450...

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and if you guys are wondering what UTI "SUNDER" means...

it is:

S&P CNX NIFTY UTI Notional Depository Receipts Scheme.

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Cant I sell it at NAV? Alchemist, Can you explain how ETF works?

If I cant sell at NAV, then what's the purpose of NAV?

You cannot sell the ETF back to UTI, unless you are a big investor.

The NAV is only an indicator for retail investors about the value of ETF's units.

From UTI SUNDER's offer document:

Not just UTI SUNDER, all ETF's allow only larger investors to directly purchase/redeem units.

That is why it is an ETF and not a normal mutual fund.

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Thanks for the Information. So it means, If I am large investor, I can sell ETFs to UTI.

Also I think that NAV is around 480 and I can easily buy ETFs around 450.

Then why dont large investors buy ETF @450 and sell it @480

If large investors try to buy 10000 units, the price would go much higher than the NAV.

There is no liquidity in this ETF.

Only 55 units were traded yesterday.

Nowadays, total sell quantity in order book remains around 200....

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Is STT applicable to UTI Sunder?

Yes.

Equity/Index based ETF's are subject to STT.

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