All of us have come across different terms like Equity, Mutual Funds, ETFs at least once in our lifetime. We know that Equity and Mutual Funds are different types of investments where Mutual Funds are typically low risk and for long term returns. A lot of us confuse ETF to be the same as Mutual Funds or at least to be on similar lines of trading but are they similar?
Let’s start with the basics. ETF is the abbreviation for the Exchange-Traded Fund. ETF is in many ways similar to Mutual Funds but they are listed on exchanges and ETF shares trade throughout the day like ordinary stocks. Unlike Equity and Mutual Funds, ETF is a compilation of securities that track the underlying index.
With the inclusive of stocks, commodities, bonds, or a mixture of investment types, ETFs are considered as a compilation of securities. Unlike Mutual Funds, ETFs are just like any other stock which has price fluctuations and can be traded throughout the day. Additionally, Mutual Funds can be traded only once a day after the market closes. ETFs offer lower expense ratios and fewer broker commissions than holding stocks individually. There are advantages to holding ETFs. But if you are someone who believes in sentimental buying then ETF may not be for you. Why?
Since ETF is a corpus of securities such as Nifty 50. The performance of all 50 will determine the value of the ETF, hence not being dependent upon a single stock. Before indulging in any form of trading, good research and analysis are required as stocks are subject to market risks. Here at Lakshmishree Investments & Securities Pvt Ltd, we work towards not only understanding your needs to invest but also assist you with the research and daily webinars that would help you curate and make one well versed with market conditions.
We had conducted a webinar in regards to ETF on 24th October 2020 i.e Saturday. Whether how to invest, where to invest, and is it a good option for you as an Investor or no. We recommend you to watch the below recorded video of the ETF webinar by Swapnil Kulkarni. This will possibly grab you good knowledge exposure and further details, information, tips, and tricks about the market.
-- Above Content By Yajur Mehta
