Mumbai, Sept. 25 -- BSE has cautioned investors against buying international exchange-traded funds (ETFs) at inflated prices, warning that their market prices could fall suddenly even if the value of the underlying overseas securities remains stable.

The exchange said units of some international ETFs were trading at a substantial premium to their net asset value (NAV). NAV is the actual per-unit value of the assets held by an ETF. A premium means investors are paying more for an ETF unit than the value of the assets backing it.

"It has been observed that units of certain Exchange Traded Funds (ETFs), particularly those investing in overseas securities ('international ETFs') are trading at a substantial premium to their Net Asset Value (...