INDIA ETF

India ETF or exchange-traded fund is based on a basket of securities listed on various exchanges in India. ETF is a security that tracks an index, a commodity or a bundle of assets, much like some index funds, however, ETF’s trade more like stock does on different exchanges, and experience changes in price throughout each day of trading. Because it trades like a stock whose price fluctuates daily, an ETF does not have its net asset value calculated every day like a mutual fund does. India ETF aims to capture the more major areas of India’s economy by gaining possession of a more diversified blend of those companies that ultimately represent a larger percentage of the Indian economy’s whole market capitalization. India’s economic growth is one of the worlds fastest paced right now, and India ETF gives a direct path to access this wealth.

The first ETF was introduced on the Toronto Stock Exchange in 1990. India joined the ETF club in December 2001 with the launch India’s first ETF ‘Nifty BeES’ (Nifty Benchmark Exchange-traded Scheme) by Benchmark Mutual Fund, based on the S&P CNX Nifty Index. India’s economy has rapidly grown; and the proficiency in such knowledge-based areas as IT, financials and healthcare has initiated that growth. Indian ETFs offer a higher ratio of expense than other domestic funds; however, administrative costs are usually a bit higher when dealing with international investments. This cost is due to the costs of certain exchanges and fees of brokerage firms that are required when trading takes place on an international exchange. You can buy an India ETF just the way you buy a share from a stock exchange. You can also buy it from a mutual fund that manages such a scheme. India ETFs can be bought and sold over the exchange through a broker on a daily basis at real-time prices unlike traditional equity funds. As they are traded on the exchange they can be bought or sold through any broker across the country thereby reaching out to a larger number of investors at the lowest possible cost.

As India ETFs are no load schemes and annual management fees are generally lower, it is an easy and cost efficient way to invest in a basket of securities. The India ETF provides more liquidity for investors who desire a short-term profit because these investors are able to trade intra-day for prices that are closer to the value of net asset. India ETF gives investors better control and flexibility to manage their investment. As the initial investment is low, investors find it simple and convenient to buy/sell.