When investing in ETFs, there are two prices to watch: the market price on the exchange and the iNAV (Indicative Net Asset Value), which reflects the fair value of the ETF’s underlying holdings, published by AMCs.

Since ETFs trade on exchanges, their market price can sometimes move away from the NAV due to volatility or demand-supply imbalances. As a result, an ETF may trade at a premium or discount to its fair value.

For example, some international ETFs are trading at a premium to their NAV because overseas investment limits have been hit.

To help you avoid trading away from fair value, we’ve added a nudge on the Kite order window that highlights when an ETF is trading at a premium or discount to its iNAV.

Here’s a guide to common mistakes to avoid when investing in ETFs.