Post by
workrestplay on May 04, 2021 10:09am
spread between price and underlying
As a fudiciary, managment must be aware if they continue to issue new shares, and that holds back the price, thus the performance, they ultimatley have a few problems. Besides the price graph of ETH and QETH not keeping pace with each other, they run the risk of not only losing market share, but the legal woes that accompany not delivering the one stated goal. The fact is, managing a one asset holding fund is fairly easy, and exceptionally easy to determine if you are meeting goal, that being being reflective of underlying asset. Sure one could argue it is due to premium or discount, but it is the cause of the discount that would be the potential problem for them. Imagine trying to explain how the underlying gained double digit gains while the product lagged while at the same time issuing new shares without abadment. While price lags underlying, issuing shares would be far costlier, in the long run, than the management fee will bring them in the short run. If I were managment, I would pray price catches up to underlying fast, before the spread widens further and becomes an issue they cannot correct.