Considering ETF as an investment option; NSE gives this tip on application - Details here

ETF Application: The individuals who are interested in investing in ETFs, the NSE has got certain important facts on the application of ETFs. NSE has recently pointed this out in one of its tweets. In case of more information or queries, the interested individuals can login to the official website of the domestic exchange at nseindia.com.

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Before moving on to its application, one must be aware of what are ETFs. ETFs have gained a wider acceptance as financial instruments whose unique advantages over mutual funds have caught the eye of many an investor, as per the official NSE website. These instruments are beneficial for Investors that find it difficult to master the tricks of the trade of analyzing and picking stocks for their portfolio. Various mutual funds provide ETF products that attempt to replicate the indices on NSE, so as to provide returns that closely correspond to the total returns of the securities represented in the index. ETF's available on NSE are diverse lot. Equity, Debt, Gold and International Indices ETF's are available.

"Did you know this about ETFs? To know more about such interesting applications of ETF, Click here: bit.ly/3IgRBSZ," the recent tweet from the official Twitter handle of NSE said.

Did you know this about ETFs? To know more about such interesting applications of ETF, Click here: https://t.co/KqjxteZazt #ETF #ExchangeTradedFunds #Investment #StockMarket #ShareMarket pic.twitter.com/5HITawsHBb

— NSEIndia (@NSEIndia) February 19, 2022

The investors must know that ETFs are tied to a sector or industry and maybe used to gain exposure to new and important sectors. Also, such strategies may also be used to reduce an overweight or increase an underweight sector.

ETFs provide exposure to an index or a basket of securities that trade on the exchange like a single stock. They offer several advantages over traditional open-ended index funds. Some of the major advantages are as follows:

1) While redemptions of Index fund units takes place at a fixed NAV price (usually end of day), ETFs offer the convenience of intra-day purchase and sale on the Exchange, to take advantage of the prevailing price, which is close to the actual NAV of the scheme at any point in time.

2) They provide investors a fund that closely tracks the performance of an index throughout the day with the ability to buy/sell at any time, whereby trading opportunities that arise during a day may be better utilized.

3) They are low cost.

4) Unlike listed closed-ended funds, which trade at substantial premia or more frequently at discounts to NAV, ETFs are structured in a manner which allows Authorized Participants and Large Institutions to create new units and redeem outstanding units directly with the fund, thereby ensuring that ETFs trade close to their actual NAVs.

In case of any further information, the interested investors can login to the official website of NSE at nseindia.com.