What It Means
iNAV (Indicative Net Asset Value) is an ETF's estimated per-unit value, calculated and published continuously through the trading day, unlike a regular mutual fund's single NAV declared once after markets close. It exists because an ETF, unlike a normal mutual fund, trades on the exchange all day at whatever price buyers and sellers agree on, and iNAV gives you a live benchmark to check that price against.
How It Works
The exchange recalculates iNAV roughly every 15 seconds during market hours, based on the live prices of the securities the ETF actually holds. If an ETF's market price trades noticeably above its iNAV, you're paying a premium over its actual underlying value; trading below iNAV means you're buying at a discount. Wide gaps between market price and iNAV usually show up in less liquid ETFs, where there aren't enough active buyers and sellers to keep the two in line.
Warning
A common mistake is placing a market order on a thinly traded ETF without checking its iNAV first. In an illiquid ETF, the market price can drift meaningfully away from iNAV, and a market order fills at whatever the current price is, premium or discount included.