What is ETF: What is ETF? How many types are there?
Investing in the Indian stock market is the first option for many people. Investors feel that SIPs will have good returns in future. However, do you know that there is another option like mutual funds? Only one ETF! ETF is a pre -transformation business fund. What is the original? How does this work? What are the types of ETFs? Find out such complete details.
What is ETF?
EX -Change Traded Fund (ETF) is a combination of securities that provide a variety of benefits such as equity trading ease -with mutual funds. It works similar to an index mutual fund. The only major difference is that ETFs can be purchased and sold in stock X -Chambers similar to individual shares.
That is, you can get units in mutual funds if you can buy fund manager. But in ETF you can buy and buy stock on your own. It appears in your demat account.
Price changes at the end of trading day in mutual funds. But not for ETF! Since they are part of the trading session, the award is constantly changing.
It should be remembered that ETF is a collection of various assets such as equity, bonds or other securities that are trading on stock X -Chambers. Based on the selected ETF, investors can invest in several securities at once. This port follows allow diversification.
Mutual funds, ETF .. should be remembered of any long -term investment. In some time, ups and downs are natural.
How does ETF work?
ETF also has a fund provider. Tracking the performance of various assets. Accordingly, investors are provided. Fund provider stock, bonds, currencies and other securities will be manufactured. Like buying stocks in the market, investors can get a part from a bucket of securities. Trading throughout the day. Depending on the value of securities, the ETF share price ups and downs in a day.
How many types of ETF?
1. Equity ETF: These are mainly invested in the company’s shares and track the performance of a specific equity index. Equity ETFs are traded similar to individual stocks in X -changes.
2. Bond ETF: These funds Mainly dealing with continuous equipment such as government bonds and debentures.
3. Commodity ETF: These ETFs invest in items like gold and silver. The price pricing for this type of ETF is determined by their demand in speed markets.
4. Sectoral ETF: These funds track the performance of a specific sector such as banking, real estate, IT and energy.
5. Index ETF: Try to reflect market index performance like Sensex or NIFTY 50.
6. Style ETF: These funds monitor a specific investment style or market -shaped such as large cap value or small cap growth instead of market indices.
7. International ETF: These funds track Japan’s Nikki Index or Hong Seng index and global markets such as US index.
ETFs are not a size-fit-all investment similar to other options. It is necessary to evaluate them based on their characteristics and personal investment goals.
(Note- This is an article designed only for information. Hindustan Times has nothing to do with Telugu. It is good to contact the SEBI registered financial advisor before any investment.)
