Summary:
Some international ETFs listed in India are trading at steep premiums to net asset value, with Motilal Oswal Nasdaq Q50 ETF reportedly at 111.8%. Overseas investment limits and strong demand have constrained supply, increasing risks for investors buying above NAV.
International exchange-traded funds (ETFs) listed on Indian exchanges are trading at substantial premiums to their underlying asset values, raising concerns about the widening gap between market prices and net asset value (NAV). Some overseas-focused ETFs are trading at premiums exceeding 100%, driven by strong investor demand and restrictions on fresh overseas investments by Indian mutual funds.
India Sees Sharp Rise in Global ETF Premiums
The difference between the market price of an ETF and its underlying net asset value has widened dramatically in recent weeks. Investors seeking exposure to US technology stocks and other global markets are paying significant premiums for the assets held by certain funds.
The Motilal Oswal Nasdaq Q50 ETF was trading at a premium of 111.8% as of October 14, 2026, compared with 62.6% on September 30.
Other international ETFs also traded at elevated premiums, although the gap varied across funds.
| International ETF | Premium to NAV |
| Motilal Oswal Nasdaq Q50 ETF | 111.8% |
| Mirae Asset NYSE FANG+ ETF | 59.5% |
| Mirae Asset S&P 500 Top 50 ETF | 58.9% |
| Mirae Asset Hang Seng TECH ETF | 31.1% |
| Motilal Oswal Nasdaq 100 ETF | 15.3% |
| Nippon India Hang Seng BeES | 4.6% |
The premiums are based on closing prices and same-day NAVs as of October 14, 2026. These are not live quotes for October 23.
The wide variation indicates that premiums are not uniform across international ETFs.
Why Are Global ETFs Trading at Such High Premiums?
The primary reason is the restriction on overseas investments by Indian mutual funds.
Under the SEBI framework, the mutual fund industry is permitted to invest up to $7 billion in overseas securities and up to $1 billion in overseas ETFs.
Individual mutual funds are subject to limits of $1 billion for overseas securities and $300 million for overseas ETFs.
These limits have restricted fresh investments abroad, consequently limiting the creation of new ETF units.
However, investor demand has remained strong.
An ETF is a market-traded security. When demand for existing ETF units exceeds available supply, their market prices can diverge significantly from the underlying NAV.
Are Global ETF Prices Rising Despite Market Weakness?
The sharp increase in ETF premiums does not necessarily indicate a corresponding rally in international equity markets.
The Motilal Oswal Nasdaq Q50 ETF was trading at ₹249.83 on October 14, compared with an NAV of ₹117.96. Its market price was therefore more than double the value of its underlying assets.
When an ETF trades at a substantial premium, its market price can decline sharply even if the prices of the underlying overseas securities remain unchanged.
The elevated premiums reflect demand for international diversification, limited creation of new ETF units and the widening difference between exchange-traded prices and underlying asset values.
Changes in ETF trading price bands have also influenced the extent to which market prices can diverge from NAV.
What Does the Premium Mean for Investors?
An ETF trading at a 50% premium means an investor is paying ₹150 for underlying assets worth ₹100.
The additional ₹50 does not represent an increase in the value of the fund's holdings.
If the premium subsequently disappears while the NAV remains unchanged, the ETF's market price would decline by approximately 33.3%.
The BSE has also cautioned market participants about the risks associated with trading international ETFs at prices significantly above their underlying asset values.
Market price, NAV, indicative NAV (iNAV), liquidity and the premium-to-NAV ratio remain important measures for investors trading global ETFs.
International ETFs continue to provide Indian investors with access to overseas markets through domestic exchanges. However, the unusually wide premiums highlight how strong demand and limited supply can cause ETF prices to deviate significantly from the performance of their underlying investments.
