Global X Japan told the Tokyo Stock Exchange on September 8 that its China Tech Covered Call ETF (ticker 576A) closed the day trading 20.6% above its underlying net asset value. The manager said it was flagging the gap because the deviation had reached 20% or more. The fund's net asset value, or base price, stood at ¥928.35 per unit. The market closing price was ¥1,120.
| Metric | Value |
|---|---|
| Net asset value (base price) | \u00a5928.35 |
| TSE closing price | \u00a51,120 |
| Deviation | 20.6% |
Global X Japan attributed the gap to the ETF's creation and redemption facility being suspended at the time. With that facility halted and market maker quotes running thin, buying demand met a market with no supply valve, and the traded price decoupled from the NAV.
The manager said it expects the deviation to close once the suspension period ends and normal creation and redemption activity resumes. Global X Japan gave no date for when the suspension will lift, and the notice does not say why creations and redemptions were halted in the first place.
For holders of the fund, the episode is a reminder that an ETF's quoted price and its net asset value are not the same thing when the plumbing behind it, market makers and the creation-redemption facility, stops working as intended.