What is Exchange Traded Fund – ETF?

Exchange Traded Fund

In this blog, we will briefly discuss about the ETFs and their different types with a comparison to Mutual Funds.

What are ETFs?

  • They are created to replicate an Index.
  • ETFs are listed and traded on the Stock exchanges.
  • There is option of putting limit orders.
  • We get the Delivery of ETFs in our Demat account.

Types of ETFs

  • Index ETF — Track the benchmark like NIFTY & SENSEX.
  • Gold ETF — Tracks precious metals like gold, silver, etc.
  • Sector ETF — Invests in stocks specifically in 1 sector.
  • Bond ETF — Invests in bonds like treasury bills, corp, etc.
  • Currency ETF — Gives exposure to foreign exchange (forex).
  • Global ETF — Invests in global stocks like Apple, Tesla, etc.

ETFs vs Mutual Fund

FeaturesETFsMutual Funds
FlexibilityThese can be bought and sold during trading hours on stock exchanges.It involves placing a request with the Mutual Fund house and generally takes a longer time.
NAVBought and sold at real-time NAVBought and sold at closing NAV
Lock-in period and Exit loadNot ApplicableApplicable
Expense RatioLow Expense ratioRelatively higher as they are usually actively managed

Few ETFs

  • Nippon India Etf Nifty Bank Bees
  • Nippon India Nifty 50 Bees Etf
  • Icici Prudential S&P Bse Sensex Etf
  • HDFC S&P BSE Sensex ETF
  • Nippon India ETF Nifty Next 50 Junior BeES
  • Nippon India Nifty Infrastructure Bees Etf
  • Motilal Oswal NASDAQ 100 ETF
  • Mirae Asset NYSE FANG+ ETF

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