Exchange Traded Funds: Why are ETFs cost effective? Details here
A prospective investor must also know that ETFs are also cost efficient. One can login to the official website of the National Stock Exchange (NSE) at nseindia.com for further details.
Those who are planning to invest must note that Exchange Traded Funds (ETFs) are an excellent investment product for all types of investors. A prospective investor must also know that ETFs are also cost efficient. One can login to the official website of the National Stock Exchange (NSE) at nseindia.com for further details.
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The NSE India has recently tweeted from its official Twitter handle about how ETFs are cost effective. The tweet said, "ETFs are cost efficient and here's why. Read up and understand more about ETF here >> bit.ly/3HjDfRA."
As per the NSE website, in recent times, ETFs have gained a wider acceptance as financial instruments whose unique advantages over mutual funds have caught the eye of many an investor. 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 ETFs are available.
The NSE notes that since an ETF is listed on an exchange , the costs of distribution are much lower and the reach is wider. These savings in cost are much passed on to the investors in the form of lower costs. Furthermore, the structure helps to reduce collection, disbursement and other processing charges.
Due to the unique structure of ETFs, all types of investors, whether retail or institutional, long-term or short-term, can use it to their advantage. They allow long-term investors to diversify their portfolio at one shot at low cost and insulate them from short-term trading activity due to the unique "in-kind" creation/redemption process.
As initial investment is low, retail investors find it simple and convenient to buy/sell. They facilitate FIIs, Institutions and Mutual Funds to have easy asset allocation, hedging, equitising cash at a low cost. They enable arbitrageurs to carry out arbitrage between the cash and the futures markets at low impact cost.
In case of further details, the interested individuals can login to the official website of NSE at nseindia.com.
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