ETF it means what? Mutual fund and E.T. What is the difference between f. How are these earnings calculated? Globally, E.T.F. Is there,
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| Mutual fund and ETF, |
'Nipty 50' is not the only index in the national stock market,
There are 350 indices based on different sectoral material strategies. These indices are constructed with certain pre-sampled stocks specific to their respective features. These include banking sector, IT, metals, private banking and retail.
The shares in them are added in a specific ratio and the respective index is formulated. Mutual fund companies have two options. One is to replicate the percentage weightage of each stock in these indices and invest accordingly.
This is the ETF. A so called exchange traded commodity.
This is the same development as the index
ETF will reach A second option is to run a mutual fund scheme based on those indices. For example, if you take 'midcap fund', you can invest in any stock in that category and increase your profit.
It is not necessary to invest only in 'midcap index' stocks.
Comparatively, ETFs have lower expenses; More in mutual fund scheme. Only the growth in the particular index is available in the ETF; Additional growth is possible in mutual fund schemes.
ETFs are the least risky mutual funds. Even more risky are mutual fund schemes. There are global ETFs and funds and you can invest in US stock market based ETFs from India.
thanks Dinesh,