Market Value (MV) vs. Net Asset Value (NAV)
Open-end funds and ETFs trade at market prices that are equal to their NAV. Open-end funds trade after the market closes, and ETFs trade during market hours. Consequently, there is no opportunity to purchase either type of fund below their respective NAV.
Closed-end funds trade like ETFs during the market hours, but have no mechanism that ensures that their NAV and market price are the same. The market value of a closed-end fund is determined purely by supply and demand for its shares, oftentimes at big discount or premium over its actual published NAV. Like for open-end funds, the NAV of a closed-end fund is reported daily after the markets close.
It is the differential between MV and NAV that creates multiple opportunities for Matisse to benefit from such mispricing before it reverts to normal levels.
Chart sourced internally from Matisse.