When we speak about how to get started investing in the markets, it is quite often
regarded as a conversation for those who are imbibed with 'trading' knowledge and
with a substantial monetary pool. It is also stated that without the 'day-to-day
trading' knowledge phenomenon, it is not a right step for one to start investing
in the market.
Add to that, new investors as well as already existing investors often feel they missed on investing in certain sectors/indexes'/stocks' growth just because they don't understand the everyday trading. And well how does that play a part in investing? Well, that is because the fear of missing out is quite often relative to those investing in the markets. Quite often investors, new and existent, feel that they have missed out on a growth story, be it stocks or sectors after the event is over. To their mental assurance, timing most of these growth stories is difficult and most of the time these stories turn out to be a short-term phenomenon.
There is where the fear of missing out comes in and investing in the markets either takes a back seat or they end up looking at more 'traditional' ways of investing like Mutual funds.
What Is An ETF And A Mutual fund?
ETFs and Mutual funds have a lot in common. Both are types of funds that have a mix of many different assets and represent a popular way for investors to diversify. While they are similar they have some key differences. One of the key differences between the two is that ETFs can be traded intraday like stocks, while mutual funds only can be purchased at the end of each trading day based on a calculated price known as the net asset value.
An exchange-traded fund (ETF) is a type of pooled investment security that operates much like a mutual fund. ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies. Additionally, ETFs can be more cost-effective and liquid compared to mutual funds.
|Fun Fact:- The first ETF was the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index, and is an actively traded ETF today.
A mutual fund on the other hand is a financial toll made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, etc. mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. mutual funds give small or individual investors access to professionally managed portfolios of equities, bonds, and other securities
Now, what do you do when 1. You are beginning your journey into investing, 2. You are not someone who has the bandwidth to time or track specific stocks/sectors etc. 3. You don't want to pay high fees.
Well, The Answer Is Exchange-Traded Funds
Now you might be wondering, 'wait, this ETF sounds like another complicated investment product that I probably wouldn't understand.' Well, it is quite a simple product, and wait till you hear what is the minimum value you can invest in an ETF. INR 500, that's it. And no this is not a 'SALE'. Some ETFs in India have baskets ready for as low as INR 500.
This is available on the ICICI Direct platform. Execution and process are made simple at ICICI Direct. For more... https://www.icicidirect.com/exchange-traded-funds Now, What Are The Different Types Of ETFs? In India, we have 5 types of ETFs- Equity, Debt, Gold, Global, and Smart beta.
And Where Can You Start Your ETF Journey
You can start your journey into ETF trading with the steps mentioned below;
For More, Click Right here:
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