Exchange Traded Funds

Exchange Traded Funds -ETF- securities

Exchange Traded Funds or ETFs are securities that are traded like individual stocks on an exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold throughout the trading day like any stock.

The price of a mutual fund scheme is determined by its Net Asset Value (NAV) at the end of a trading day. The price of an ETF fluctuates throughout the trading day as they are traded during the trading hours on a stock exchange.

Most ETFs charge lower annual expenses than many mutual funds. As with stocks, one must pay a brokerage to buy and sell ETF units.

You can buy and sell Gold, Index, Banking or International ETFs online through your Karvy online account.

Benefits of ETFs:

  • Flexibility to trade:As ETFs can be traded like individual stocks throughout the day on the stock exchange, it provides liquidity to the customers.
  • Lower Costs:ETF’s are listed on the stock exchange and generally have a less expense ratio than most mutual funds
  • Simple structure:ETFs are simple in structure and easy to understand.
  • Tax Efficiency:ETFs generally generate relatively low capital gains because they typically have low turnover of their portfolio securities.
  • Diversification:Investments in ETFs are widely diversified as indices are construed to represent performance of the stock market as a whole.