E Fund MSCI US 50 ETF experiences substantial premium, E Fund reminds investors to pay attention to risk-based rational investment
The E Fund MSCI US 50 ETF has recently seen a substantial premium in the secondary market transaction price, reaching as high as 42.46% as of the morning of January 26. As a result, E Fund has issued premium risk warnings and urged investors to pay attention to the risks associated with secondary market transaction prices. Trading of the ETF was suspended from the opening of the market on the afternoon of January 26 until the close of the day.
In response to the high premiums in secondary market transactions, E Fund has raised the cumulative single-day subscription limit for the U.S. 50 ETF to 50 million units. The fund also announced that it will take measures such as increasing the number of trading suspensions and extending the suspension time based on the premium rate in order to protect the interests of fund shareholders.
A substantial premium for an ETF indicates that its secondary market transaction price is significantly higher than the fund share reference net value (IOPV). This means that investors need to be cautious as the cost they pay may deviate significantly from the net value of the fund shares, potentially resulting in significant losses if the transaction price returns to the net value of the fund in the future.
Lin Weibin, general manager of E Fund’s Index Investment Department and fund manager of the E Fund MSCI US 50 ETF, advised investors to pay special attention to the premium risk of secondary market transaction prices and to make investment decisions rationally.
The fund has seen a significant increase in trading activity since January 22, with the transaction price being significantly higher than the fund share reference net value, posing a large premium risk. Investors are urged to heed these warnings and consider the risks associated with the current market conditions when making investment decisions.
This article comes from: Financial Industry