How Do You Calculate the Fair Value of an ETF?

How do you calculate the fair value of an ETF?

An ETF has no fair value of its own, because it is only a basket of stocks. To find it, you value every stock the fund holds, weight each result by its share of the fund, and add the pieces up. This is called a look-through valuation, since you look through the fund at what it actually owns.

Price, net asset value and fair value are three different things

The market price of an ETF is what you pay on the exchange. The net asset value is what the holdings are worth at today's market prices, and the fund keeps its price very close to it. Neither of the two tells you whether those stock prices are high or low, which is the question a fair value answers.

A simple example with made-up numbers

Imagine a small fund that holds only three stocks. Stock A makes up 50 percent of the fund and trades 20 percent above its fair value. Stock B makes up 30 percent and trades exactly at its fair value, while stock C makes up 20 percent and trades 10 percent below it.

Now weight each gap by its share of the fund. Half of 20 is 10, thirty percent of zero is zero, and a fifth of minus 10 is minus 2. Added up, the fund trades about 8 percent above the fair value of what it owns. These numbers are made up, so they only show how the steps fit together.

A real example: Invesco QQQ

On our QQQ page, as of October 18, 2026, the valued holdings of Invesco QQQ trade 31 percent above their fair value on average. That result rests on 89 of 101 disclosed positions, which together make up 91 percent of the fund. The average quality of those holdings is 69 out of 100.

The three largest positions move the result the most. NVIDIA has a weight of 8.0 percent and trades 8 percent above its fair value. Apple, at 7.7 percent, trades 1 percent below it, and Microsoft, at 5.8 percent, trades 12 percent below it. The figures change every day, so the page always shows the current state.

Common mistakes

• Using the net asset value as the fair value. It only adds up market prices, so it can never tell you whether they are high.
• Ignoring the weights. In most index funds a handful of large holdings decides most of the result, so a simple average of all holdings is misleading.
• Filling gaps with guesses. If a position cannot be valued, leave it out and state how much of the fund the result covers.
• Forgetting the fee. The expense ratio does not change the valuation, but it is paid every year, regardless of whether the holdings are cheap or expensive.

Check any fund yourself

You can open any of our valued ETFs, or use the ETF fair value calculator to pick a fund or enter your own holdings. For a single stock, type its name into the free Fair Value Calculator, and you will see its fair value, its quality and how far the price is from it.

Does an ETF have its own fair value?

No. A fund owns a basket of stocks, so its fair value comes from those stocks. You value each holding and weight it by its share of the fund.

Is the price of an ETF the same as its fair value?

No. The market price stays close to the net asset value, which is simply what the holdings are worth at today's prices. The fair value asks a different question: are those prices themselves high or low?

What if some holdings cannot be valued?

Leave them out and say so. A result that covers 91 percent of a fund is honest, while a guess for the missing part would only look complete.

Not financial advice and not a buy or sell recommendation. Valuations are model-based and may be wrong; past performance does not indicate future results.