New Delhi, July 26 -- If you have ever invested in an ETF, you may have noticed that it displays two values-a market price and a net asset value (NAV). Unlike other mutual funds, where investors transact only at the NAV, ETFs are bought and sold on stock exchanges throughout the day at market prices.

The NAV represents the per-unit value of the securities held by the ETF and is calculated by the fund house, while the market price is determined by demand and supply on the exchange. Although these values usually remain close, ETFs can trade at a premium (market price above NAV) or a discount (market price below NAV).

It is calculated by comparing the market price with the NAV and expressing the difference as a percentage of the NAV. A pos...