Pricing Basket Definition

Learn the definition of pricing basket and other ETF terminology from the glossary.

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Learn more about Pricing Basket

An ETF Pricing Basket refers to the portfolio of securities that is used to calculate the net asset value (NAV) of an ETF on a per-share basis. The pricing basket is a key component in the creation and redemption process of ETF shares, helping to ensure that the market price of the ETF closely aligns with its NAV. Comprising a selection of securities from the ETF's portfolio, this basket aids market makers and investors in gauging the fund's value throughout the trading day. The composition of the pricing basket may vary, encompassing a subset of the ETF's holdings or representative securities. By offering real-time insights into the fund's value, the pricing basket contributes to transparent and efficient ETF trading, fostering an environment where market participants can make well-informed decisions based on accurate and timely information.

Related Terms

ETF Glossary is’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.