US ETFs Listed in India Trade at 65% Premium Over iNAV; Investors Face Risk

India-listed US exchange-traded funds are trading at significant premiums to their indicative net asset values, with some reaching as high as 65%. The sharp divergence is primarily attributed to limited supply driven by overseas investment caps, coupled with strong investor demand for US equities exposure.

Changes in ETF circuit-limit calculations have also contributed to the premium widening. Investors purchasing at these elevated premiums face the risk of substantial losses if the premium-to-iNAV gap eventually narrows or normalises.