New Delhi, Sept. 22 -- Motilal Oswal Nasdaq Q50 ETF (MONQ50) crashed 20% on 22 September, extending a sharp reversal that saw the ETF lose about 46% from its peak in just two sessions. The ETF had touched Rs.471.99 on 21 September before falling to Rs.317.04 and then hitting the 20% lower circuit.

The bigger issue was the huge gap between the ETF's market price and the value of its underlying holdings.

According to Protima Dhawan, Director & Unit Head, Anand Rathi Wealth, MONQ50 was trading at a premium of nearly 235% to its NAV by 18 September. As of 22 September, its market price was Rs.253.64 against an NAV of Rs.120.23, meaning the ETF continued to trade at a substantial premium even after the sharp fall.

ETFs are designed to trade...