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ETFs/ Exchange Traded Funds

  By : , Palakkad, India       25.6.2010         Phone:-          Fax:-          Mail Now

What are ETFs/ Exchange Traded Funds ?

ETFs are open ended passively managed mutual funds that are traded on exchange with an objective of providing returns as that of a particular market index. Based on the broader market ETFs are of following types.


  • Equity
  • Bonds
  • Commodities

Advantages of ETFs:

  • Easier to track
  • High quality and well diversified portfolio.
  • Convenience of trading & Real Time NAV
  • Available in lower denomination
  • Dividends received are tax-free.
  • Investments are exempt from wealth tax

ETFs combine the benefits of : Mutual Funds (Diversification, Regulated, Open ended) and Stocks (Bought and Sold during the day, Transparent, Liquid).

Users of ETF:

Due to unique structure of ETFs, all types of investors whether retail or institutional, long term or short term, can use it to their advantage.

  • Investors

  • Hedgers

  • Arbitragers

Structure & Working of ETFs:

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