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I own shares in the iShares MSCI China A UCITS ETF. During my day job I keep an eye on my portfolio where I have one other position also traded from London. My other position is quite volatile, rising and falling throughout the day whereas my ETF stays stagnant at 0% change.

I figured this was because it was an ETF derived from Chinese stocks and when I'm keeping my eyes on my portfolio, the Chinese have theirs closed. To my surprise I noticed at about 1500 GMT that the ETF jumped 0.8% and ceased moving but it is moving.

Why is it moving so little? Are the stocks in the ETF simply not that volatile?

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It's not moving because this ETF is very illiquid and people are just not trading it. The actual value of your shares is moving, but you don't see it reflected in the ETF (as the price of the ETF that you see where you check it is the last traded price).

PS: You can also look at bid and ask which should be more reflective of the intraday price movements.

  • As a follow up to this - Do you mean the underlying shares are non-liquid or the ETF itself is non-liquid? – Nanor Dec 21 '16 at 11:48
  • The ETF itself is not liquid. – SMeznaric Dec 21 '16 at 12:59
  • So the price of the ETF is affected by how much the ETF itself is traded? And not the underlying shares? – Nanor Dec 21 '16 at 14:24
  • It's affected by underlying shares (as people will not want to take the other side of the trade generally if you deviate too far from the value of the underlying shares). But since there are few trades you see hardly any updates of ETF price during the day. – SMeznaric Dec 21 '16 at 15:08
  • Why do I see any? Surely the Chinese exchange is closed when the ETFs exchange is open? – Nanor Dec 21 '16 at 16:08

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