Gregory Skidmore

Beware Small ETFs

It seems to be a problem with market makers. PCY has been trading below it's intraday NAV for two months now. It seems whoever makes the market is not redeeming their creation units. So it continues to trade below NAV. Usually market makers arbitrage this spread to make money. Right now NAV is $21.69 and last trade is $18.55. If you look at EMB from iShares it is actually a smaller Emerging Markets Bond ETF as well with lower volume and fewer assets under management. NAV is $86.60 and last trade is $85.21. EMB seems to have market makers doing a better job making a fair market. My firm holds PCY.