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If you want to know about Exchange Traded Funds then you are at the right place. In this blog you will be given all the information related to Exchange Traded Funds so that you will be able to decide whether you should invest in it or not.

Exchange Traded Fund

In fact, ETFs are a type of mutual fund.

It is called ETF or Exchange Traded Fund because it also trades like other stocks on NSE or BSE.

These can be bought and sold in the stock market in the same way as shares of a company are bought and sold.

In short, we can say that such mutual fund schemes that trade in the stock market are called ETFs.

What is ETF

Exchange Traded Funds are those funds which you can buy from stock exchanges like BSE or NSE etc.

These are similar to index funds of mutual funds.

You can buy index funds from a mutual fund company; But ETFs can be bought only from stock exchanges.

For example if you are buying SBI Long Term Fund; So buy from SBI’s AMC. But you can buy ETFs from the exchange itself.

This means buying ETFs is similar to buying shares.

ETFs are similar to index funds.

You buy and sell units of an index fund from a mutual fund house. But you can buy or sell ETFs only on the stock exchange.

Buying or selling of ETFs depends on the availability of the buyer or seller in the stock market.

To buy or sell ETFs, you need a demat account. Brokerage charges have to be paid on its sale like mutual funds.

Types of ETF 

There are many types of ETFs available in India. In which equity, debt or gold ETFs are seen.

Let us now know a little more about them as well.

Equity ETFs

You can buy Nifty 50 through ETFs. Nifty 50 contains the names of top 50 companies of India.

Just as the Nifty 50 will increase, so will your ETF returns.

Their expense ratio ranges from 0.05 to 0.01%.

Bond And Debt types of etfs

Their expense ratio ranges from 0.25% to 0.6%.

Gold ETF

You can also invest in gold through ETFs. Just as the price of gold will increase, in the same way the price of its ETF will also increase; And you can get good returns.

Their expense ratio ranges from 1% to 1.5%.

etf

Gold ETFs are available from most of the popular fund houses. in which

Global Indices

One can also invest in big companies like American company like Google, Facebook, Apple through ETF. like-

  • HANG SENG
  • NASDAQ 100
  • Dow Jones
  • Euro Stoxx 50 etc.

That’s why we can say that ETFs are a great option to invest in the stock market.

Whether you want to invest in Sensex, invest in Nifty or Gold, or invest in top foreign company.

You can get good returns by investing through ETFs.

Benefits of ETF

#1 ETFs have very low expense ratios, yet they are not that popular in India right now.

As the interest of the people in India increases, its expense ratio will also keep decreasing in future.

#2 One of its benefits is that no individual can invest in government securities; Whereas one can also invest in it through ETFs.

#3 Managing them does not require a large team of fund experts, as ETFs follow an index.

Therefore, the fund management fee is very less in this.

#4 Like a share in the stock market, you can buy or sell it anytime during any working day of the market. Hence good liquidity is found in it.

#5 If you have selected any index or commodity for investment; So you can easily choose the best ETF. Because ETFs also follow one or the other index.

Disadvantages of ETF 

1- Active Management Funds are well managed; Because investing is done by selecting a group of several stocks; Which gives good returns.

ETFs are called passive management funds. Therefore, they give relatively low returns.

2- ETFs are less popular right now in a country like India. So there are some ETFs that you may have to wait for a few days to sell.

Because you will sell only when there is a buyer available in the market.

Still, we can say that as its popularity increases, this problem will also decrease.

3- There are not many ETF options available in India as compared to developed countries.

where do you invest your money

Being a passive management fund, it follows the index itself and the fund is formed from it. for example-

  • Indian Indices like Nifty 50, Sensex etc.
  • Foreign Indexes like Nasdaq
  • Gold and
  • In industry sector like Pharma Sector, IT Sector etc.

How to Identify a Category of ETFs

By clicking on the ETF about which detailed information is needed, you can check their performance etc.

exchange traded fund

You can guess by looking at the list.

Based on the name of the ETF, you can know what type of fund it is.

For example, by the name of Birla sun life gold ETF, it can be known that it belongs to Birla Company; And follows the Gold Index.

In this way, we can know that the gold ETF which is written at the end follows the gold index.

Similarly, some ETFs are listed as Nifty, Nifty Junior or Nasdaq.

Based on that, we can know what this ETF is related to.

What is the fundamental difference between Mutual Funds and ETFs

In fact, ETFs are a type of mutual fund.

The fundamental difference between mutual funds and ETFs is that ETFs can be bought and sold just like stocks. Whereas other mutual funds cannot buy or sell the scheme directly from the stock market.

We buy mutual fund schemes from a mutual fund company; And redeem the unit with him or receive the payment.

Whereas ETFs are traded in the stock market; And you can buy or sell it in the stock market itself.

Just as each share has a value of its own; Similarly, ETFs also have a fixed price.

When the market opens, its price is fixed according to its demand and supply.

You can buy ETF from the stock market in real time i.e. at that time price at any time.

Whereas the unit price of a mutual fund is decided in the evening after the market closes.

This way, depending on your financial goals and risk appetite, you can get good returns by investing in ETFs.

etf

How to Invest in ETFs

As you know, ETFs are traded in the stock market and can be bought or sold from there.

For this you need to have a demat/trading account. Without this you will not be able to invest in it.

If you do not have a demat account; so you Zerodha You can start investing immediately by opening your account online sitting at home from a platform like

Zerodha Click or tap here to open Demat account from

You can easily operate Demat account in any mobile or computer.

How are ETFs Taxed?

Investments made in equity ETFs for more than 1 year are considered as long term investments.

Long term capital gains above Rs 1 lakh in a financial year attract 10% tax. There is no tax on LTCG less than 1 lakh.

Investments made for less than 1 year are considered as short term investments. Short term capital gains are taxed at 15%.

E-KYC has become very important in today’s time like if you want to open your bank account then you need ekyc for that, or if you want to get pan card then ekyc is required. So we can say that doing ekyc helps you in many things.

In this blog we are going to talk about ekyc, what is ekyc and how to get it done etc. so that you can get help to get ekyc done.

What is KYC

The full form of KYC is- Know Your Customer. It simply means- Know your customer.

It is a process in which a financial or other institution obtains information about the identity of its customer, his address or his age, date of birth, etc.

He also verifies these information through statutory certificates. This process of identifying the customer is called KYC.

What is eKYC

e-KYC Means : Electronic Know Your Customer

It can be understood in this way that the process of authenticating your customer’s identity in a digital or electronic way is called e-KYC.

In this, the process of customer identification is accomplished with the help of digital or electronic devices instead of paper certificates.

e-KYC Aadhar card based is a paperless process, What you must do before investing in mutual funds, Otherwise you will not be able to invest in mutual funds.

For investing in mutual funds e-KYC process of

Before investing in mutual funds, you have to complete the KYC process. You can do this either offline or online.

If you want to know about Mutual Funds then detailed information about it what is mutual fund, and how to invest in, is told through the article.

You can do e-KYC for investing in mutual funds from the website of CAMS Kra or iciciprudential. But while doing KYC with CAMS Kra, there is a restriction that you have to invest in any fund at the same time.

These restrictions are not comfortable for a new investor.

So today we will understand the process of e-KYC from ICICI Mutual Fund website; Because it does not require investment along with doing KYC.

Online e-KYC Required forms to be kept ready for

  1. mobile number
  2. E mail ID
  3. Mobile or laptop computer with camera for taking photos
  4. PAN card scanned image
  5. Scanned image of front and back of Aadhar card

E-KYC process steps

  1. In your mobile or computer browser, type- ICICIPRUAMC.COM/ONLINE-KYC

e-KYC

  1. When the online KYC page opens, first type your name.
  2. Enter E-mail ID, OTP comes on this E-mail ID.
  3. Enter your PAN number.
  4. Enter your 10 digit mobile number.
  5. Tick ​​the check box, and then click or type the Get OTP mark.

e-KYC

  1. Click on Choose File to upload ID Proof like PAN Card. And upload the already scanned image.
  2. As soon as the PAN is uploaded, the photo and its details will appear, which you should check carefully. If the information is correct, go to Next.
  3. Upload the front and back images of the Aadhar card for proof of address as per the procedure given above.
  4. Check Aadhar card details if it needs some correction; So you can correct that too.

Process of e-KYC continue

  1. Tick ​​the box for Term & Condition and go to the next step.
  2. All your information will be displayed on the next page; Check it out carefully.
  3. Select some other information like Address Type (Residential / Business) etc. and Annual Income etc., and proceed further.
  4. In the next step, select the details of Fatca etc. and go to the next step.
  5. Upload the scanned image of your signature on plain paper; And tick on Term & Condition.
  6. In the last step of e-KYC you have to upload your photo and video; For which click on face image. After clicking the photo a number will be displayed on the screen; Who has to speak in front of the camera. Thus this step is completed and a thank you message is received.
  7. After completing this process of e-KYC KYC Form Screen A page of . From where the link of Normal e-sign or Aadhar e-sign appears. In which you can complete this process through OTP by entering the details of Aadhaar.

How e-KYC is more simple and useful

  1. In online KYC, the entire process is completed in a very short time; Whereas the offline process sometimes takes 2 to 4 weeks.
  2. You do not need to collect paper certificates for e-KYC. This makes it easy for the customers as well as the service provider company. It works only with Aadhar card.
  3. Normally collecting a lot of records in KYC leads to unnecessary expenditure of money; Whereas in e-KYC this process is completed without any extra cost.
  4. We do not have to manually fill in the information because of the autofill feature; Which takes less time. Autofill also prevents type errors; Because all the information is taken automatically.