RE: Tracking error19 Jun 2023 08:58
The price of an index-tracking ETF should be linked to the value of the index, not market sentiment about the ETF itself.
ISF is a little more complicated as it collects dividends on the underlying shares. So if a number of FTSE constituents go ex-div on the same day, as you explained below, that should lower the FTSE index and the ETF price.
But in principle, Black Rock should be able to distribute the dividends it collects, independently from ETF price.
Maybe another factor is redemptions by large institutional investors. If they sell large chunks of their ISF back to Black Rock on ex-div day, reducing its asset value, maybe this could explain a price change in the ETF.