Discount to NAV

I have read on your website that units of Morgan Stanley are trading at a discount. But I was under the impression that I could sell the units at the NAV. Why is there a discount? -Rajendra P Singh Morgan Stanley is a closed-end fund, which means that you can buy and sell the units on a stock exchange, rather than directly with the fund house. Therefore, there is a possibility that the market price of the units on the stock exchange might be different from the NAV, which is calculated by the fund house based upon the value of the securities held in the portfolio. Morgan Stanley Date   Closing Price*   NAV   31-Mar-03   8.40   11.49   30-Jun-03   9.90   13.93   30-Sep-03   12.80   17.84   31-Dec-03   16.85   23.09   31-Mar-04   16.95   22.67   30-Jun-04   13.40   18.24   30-Sep-04   15.35   21.35   31-Dec-04   19.35   25.80   31-Mar-05   21.90   25.73   29-Jun-05   22.55   27.90   29-Sep-05   27.50   34.69   *Closing Price on the NSE   When the units trade on the stock exchange, the market price is determined by the forces of demand and supply, just like an equity share. This market price of the units of a closed-end fund tends to be less than the NAV. It is the same case with Morgan Stanley Growth Fund. Hence, we had mentioned that the units are trading at a discount to the NAV. For an investor, this means that if he sells his units at present, then he would realise less than the NAV, as the units are trading at a discount on the stock exchange. However, if he retains the units till maturity, then he can sell them directly to the fund house at the NAV prevailing at that time. Therefore, please note that you cannot sell the units in the market at NAV, but at the prevailing market price, which may or may not be equal to the NAV.