Can an investor make money by buying funds selling at a discount?
Since there is no guarantee that funds trading at a discount will ever trade at their net asset value, there is no guarantee that the investor can make money by purchasing shares trading at a discount and hoping for that discount to disappear. Alternatively, there is no guarantee that funds trading at a premium will continue to trade at a premium. Investors that purchase funds trading at a premium may be subject to premium erosion, and even trading at a discount.