Zombie ETF

A zombie ETF is a type of exchange-traded fund (ETF) that is trading at a significant discount to its net asset value (NAV). This can happen for a variety of reasons, such as when the ETF is holding illiquid assets, when there is a lack of demand for the ETF, or when the ETF's management fees are too high.

Zombie ETFs can be a risky investment because they are more likely to be liquidated or delisted than other ETFs. Additionally, they may not track their underlying index as closely as other ETFs, which can lead to losses for investors.

There are a few things to look for when considering whether to invest in a zombie ETF. First, you should make sure that the ETF is holding liquid assets. Second, you should check the ETF's trading volume to make sure that there is enough demand for the ETF. Finally, you should compare the ETF's management fees to those of other ETFs in the same category.

If you are considering investing in a zombie ETF, you should be aware of the risks involved and do your own due diligence before making a decision.

Here are some additional details about zombie ETFs:

• Zombie ETFs are often created by merging two or more ETFs that are trading at a discount to their NAV. This can help to increase the liquidity of the ETF and reduce the discount.
• Zombie ETFs can also be created by issuing new shares of the ETF at a discount to the NAV. This can help to raise capital for the ETF and reduce the discount.
• Zombie ETFs are not always a bad investment. In some cases, the discount can represent an opportunity to buy the ETF at a bargain price. However, investors should be aware of the risks involved before investing in a zombie ETF.