eNAV: Introducing an Exciting New Tool
This article is relevant to financial professionals. If you are an individual investor, please inquire with your financial professional.
WisdomTree is thrilled to be an early adopter of eNAV (estimated NAV) and able to provide this exciting new tool to financial professionals via our website. With the passing of the ETF Rule, issuers are no longer required to publish IOPV (indicative optimized portfolio value). We feel IOPV is an antiquated metric, and we are collaborating with Virtu ITG Solutions Network LLC (Virtu), a leading ETF market maker, to disseminate their eNAV product.
What is it? eNAV is an estimate of the value of the underlying basket constituents in an ETF. Unlike IOPV, eNAV seeks to provide a real-time estimation of the value of the international equity and most fixed income ETFs that may have more dated underlying pricing. The estimations are made based on international proxy products that are trading around the world as well as a partnership between Virtu and MarketAxess, one of the largest fixed income trading venues in the world. The eNAVs are calculated by Virtu. The eNAV is determined, and underlying components are fair valued, according to Virtu’s established methodology (the “eNAV methodology”). The eNAV is continuously updated and disseminated during U.S. market trading hours. We believe the eNAV is indicative and is for informational and reference purposes only. The eNAV methodology may differ from the fund’s NAV. While the eNAV does include a fair valuation aspect, the eNAV may be based on stale information1.
Where can you find it? The tool is available on the WisdomTree website for financial professionals only.
Will IOPV still be available elsewhere? No, this unique product will only be available via the website, as IOPV will no longer be distributed on third-party data platforms.
What else should I know? eNAV is not the same as current fund price or a fund’s bid/ask spread. eNAV is providing a real-time fair value of the underlying basket, while the fund pricing is fair value of the underlying basket PLUS costs. Those costs can include local trading costs and taxes, creation/redemption fees and commissions. Even though the tool is seeking to provide a fair value of the underlying securities, the funds are likely to price at a premium or discount to the published eNAV because of these associated costs.
What if I have questions? Reach out to your local rep or email the Capital Markets team directly at USCapMkts@wisdomtree.com.
This is the first time financial professionals will have this much transparency into the value of an ETF’s underlying basket of holdings and how that basket’s fair-value bid/ask spread compares to the ETF spread they see on-screen. We are excited to be one of the first issuers to leverage this product and hope this will enhance the trading and investing experience in WisdomTree Funds.