It should be structured like closed-end fund not open-end , is it a mistake in curriculum or it is misunderstood by me ?
Shweser says that ETFs are structured like closed-end funds
ETFs use an arbitrage mechanism to keep them trading close to NAV (net asset value) because they’re for example tracking an index.
If the ETF is trading above NAV, new shares are created.
If the ETF is trading below NAV, existing shares are redeemed.
Hence open-end.
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You mean when it trades above net asset value , new shares are created, then quantity supplied will increase to the extent that make price decreases to be equal to net asset value. Also the arbitrageurs start to sell above NAV shares and buy below NAV shares making share price = net asset value.
Am i getting the idea right ?
yes