BSE Cautions Investors: The BSE has cautioned investors and market participants about certain Exchange Traded Funds (ETFs), particularly those investing in overseas securities, trading at a substantial premium to their Net Asset Value (NAV).
The exchange said the NAVs of the underlying schemes of these ETFs have remained broadly stable, while new units cannot be created by mutual funds as the overseas investment limits available to mutual funds are fully utilised.
BSE advised investors to exercise extreme caution and conduct due diligence before placing orders in such ETFs, including verifying the NAVs provided on the stock exchange, AMFI website or trading application/terminal.
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The exchange also cautioned that investors purchasing such units at steep premiums are exposed to the risk of an abrupt fall in prices unrelated to movements in the underlying securities.
Such a fall could occur upon enhancement of overseas investment limits or migration of the base price for ETF price bands to the T-1 day NAV from April 1, 2027, as per the SEBI circular dated June 15, 2026.
The provisions came into effect from September 7, 2026.
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