SPDR Straits Times Index ETF – Net Asset Value

Let’s take a look at the Net Asset Values of SPDR Straits Times Index ETF (“STI ETF”) over a period of time.

30.6.2011 30.6.2012 31.12.2012
NAV $3.188 $2.932 $3.225
STI 3,120.44 2,878.45 3,167.08
NAV to STI 1.021 1.018 1.018

Notice the close positive correlation between NAV and the STI. NAV is about 1.02 times above STI.

Latest information as at 5 March 2013 from SPDR webpage:

NAV per unit = $3.27 (which was also last price traded on SGX)
Dividend yield of stocks in STI ETF = 2.45%
STI =  3,248.26 points
NAV to STI = 1.006

If we apply 1.02 to 3,248 points (STI), calculated price of SPDR STI ETF is $3.313. Isn’t last traded price of $3.27 a bit lower than $3.313? Is there an arbitrage opportunity?

Copyright © 2013, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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