Understand Exchange-traded Fund

Definition
Exchange traded funds are much more like stocks and it is traded on stock exchanges. Exchange-traded funds or ETF can hold assets such as the stocks or bonds and it is traded at the same price as the NET or the net asset value. The ETF could also be attractive to investors because it costs low, tax efficient and it has this stock-like feature.

Advantage of investing into exchange-traded fund
1. Exchange-traded funds have a lower expense ratio rather than that of the other mutual funds. It does not have to invest on cash contributions or fund cash redemption and it also does not have to maintain a cash reserve for redemption so it can save on brokerage expenses.
2. Exchange-traded funds are tax efficient and it is more attractive than that of the other mutual funds.
3. Because of its stock-like features, it can be well traded on the market so that the investors can carry out the same types of trades that they can with a stock.

Exchange-traded fund future performance
Exchange-traded funds are subject into the risks that may result to the loss of the capital. It’s past performance don’t necessarily guarantee of the future results.

Samples of exchange-traded funds where you can invest
1. MSCI India Index ETN (INP)
2. INDIA FUND (IFN)
3. Wisdomtree India (EPI)
4. Poweshares India (PIN)

Quote Of the Day:
The exchange-traded funds combine the valuation feature of a mutual with the unit investment trust, in which it can be bought or sold at the end of the trading day.

Best Reading:

• What is No-Load funds
• What is Balanced Mutual fund

Conclusion:
Exchange-traded fund offers the investors an undivided interest with securities and other assets. It is similar in the traditional mutual funds in exemption that the shares of the exchange-traded funds can be bought and sold like stocks.We wish you a happy reading on the understand exchange-traded fund.

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