ETF:
ETF stands for Exchange Traded Funds. Due to the ease of selling and buying and with the expenses which is low, ETF has grown its popularity. Exchange Traded Funds is works similar to a mutual fund in which one can buys and sells in the stock markets. Net Asset Value (NAV) is calculated by the mutual fund at the end of each day while exchange traded fund value is not constant, it always changes throughout the day. Thus, as far as investments is to be concerned then the exchange traded funds is similar to a mutual fund. When the mutual fund is concerned as buying and selling then the exchange traded funds work similar to a equity or a stock in which one can trades on stock exchanges like the NSE is used to be. Exchange Traded Funds act as a hybrid between the mutual funds and the stocks. Exchange Traded Funds is a similar to a index fund consist of number of a stocks which contains the values which keep on changing according to the demands and the supplies of a market. Index fund is a type of mutual fund having the portfolio constructed in order to track or to match the component of markets index, like an Standard & Poor’s 500 indexes (S&P 500). Thus the index mutual funds provides the broad market exposures with a operating expenses which is relatively low and having the potfolio turnover which is also low. Exchange Traded Funds is a very good investment vehicle for all types of investors including the large and small investors. Exchange Traded Funds which is a popular fund, is similar to an mutual funds but it used to trade like the stocks. Exchange Traded Funds have a become a very popular choices. Similar to stock in which one sells or buys, pay its commission, is the case in selling and buying Exchange Traded Funds. Depending upon, one how trades an Exchange Traded Funds, trading fees can be quickly adds up and which reduces the performances of investment. On the other hand, no-load mutual funds sell without buying any commission or any charges of sale, which makes the mutual fund advantages over the Exchange Traded Funds. Thus it is an important for one to be aware of the trading fees while comparing the investments in an Exchange Traded Funds to similar investments in mutual funds.
How to invest or buy in an Exchange Traded Funds:
Similar task at which one can buy company stock or shares. There is a need of Demat account. The number of units of a ETF or a Exchange Traded Funds one buy will be appears in their portfolio in its respective Demat account. One should always to be aware of the different fees structure of each, when one is deciding between the two, mutual funds and exchange traded funds. One should always remember that trading Exchange Traded Funds actively like the stocks can reduces the performances of investment as the commissions can piles up.
Advantages of investing in Exchange Traded Funds:
There is many advantages of investing in Exchange Traded Funds:
- There is no use of papers work. Thus it is the easiest method for buying and selling in a mutual funds.
- NIFTY BeES ETF gives the best affordable way for buying Nifty.
- Real time NAV calculation: The price of an ETF can be think as NAV and it keep on changing real time. Thus the performances of ETF is very transparent and thus it is easy for the one to judge.
- GOLD ETFs such as GOLDBEES is the best which provides the way of investment in gold. There is no need to buy golds physically. GOLDBEES provide the unleveraged way of investing in the small amounts of gold in compared to the trade golds in commodity exchange.
But with having a so many of the advantages of Exchange Traded Funds, there is also a some disadvantages in which the investors, before jumping into the ETF world, is need to be aware.
List of Exchange Traded Funds traded on NSE India:
- ETFs Index Funds:
- Junior Nifty BeES
- Nifty BeES
- S&P CNX NIFTY
- QNIFTY
ETFs Banks:
- KOTAKPSUBK
- Bank BeES
- RELBANK
- PSUBNKBEES
Exchnage Traded Funds Gold:
- GOLDSHARE
- QUANTUMGOLD
- KOTAKGOLD
- RELGOLD
- GOLDBEES