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Mirae Asset Mutual Fund has recently launched the "ABCDETF" series – an investor education and awareness initiative that breaks down the benefits of Exchange Traded Funds (ETFs ).
In the first part of the ABCDETF series, we explored how Exchange Traded Funds (ETFs) aims to offer relatively a low-cost investment avenue for Indian investors.
Now, in this second part, let's dive deeper into the advantages of trading ETFs on stock exchanges.
What exactly is ABCDETF?
- A - A relatively low-cost Investment Avenue
- B - Buy and Sell on stock exchange
- C - Can be transacted at a real time iNAV (intraday net asset value)
- D – Seek to Discover the opportunities
- ETFs is a basket of assets that tracks an index, a commodity or bonds
- However, unlike a regular mutual funds, ETFs trade like a common stock on a stock exchange
- The trading price of ETFS keeps on changing
- ETFs simply replicate the performance of the underlying index
- You need a demat account to buy and sell ETFs
- ETFs may be bought and sold in real time throughout the trading day. In traditional mutual funds, investors cannot buy and sell at real time
- However, at times, ETFs may attract impact costs i.e. difference in actual cost of ETF and trading cost of ETF
- ETFs also enable investors to participate in commodities like gold ETFs and silver ETFs through a brokerage/demat account
Conclusion
ETFs allow investors to buy and sell ETFs anytime during the trading day. While ETFs are good investment vehicles for long term, investors who want to do short term tactical allocation and trading may also explore ETFs.
In the third part of our series, we will explore how ETFs can be transacted at a real time iNAV.
An Investor Education and Awareness Initiative by Mirae Asset Mutual Fund.
All Mutual Fund investors have to go through a one-time KYC (Know Your Customer) process. Investors should deal only with Registered Mutual Funds (RMF). For further information on KYC, RMFs and procedure to lodge a complaint in case of any grievance, you may refer the Knowledge Center section available on the website of Mirae Asset Mutual Fund.
The information contained herein is compiled from third party and publicly available sources and is included for general information purposes only. Views expressed here cannot be construed to be a decision to invest. The statements contained herein are based on current views and involve known and unknown risks and uncertainties. Whilst Mirae Asset Investment Managers (India) Private Limited (the AMC) shall have no responsibility/liability whatso- ever for the accuracy or any use or reliance thereof of such information. The AMC, its associate or sponsors or group companies, its Directors or employees accepts no liability for any loss or damage of any kind resulting out of the use of this content. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein. Any reliance on the accuracy or use of such information shall be done only after consultation to the financial consultant to understand the specific legal, tax or financial implications.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
All the above data mentioned is as on October 2024, latest available, Source- NSE
