Benefits of ETFs
Diversification
ETFs offer exposure to a diverse range of shares spreading risk and adding to portfolio stability.
Liquidity
Traded on stock exchanges, ETFs provide easy buying and selling, ensuring quick and efficient transactions.
Low costs
With generally lower fees than traditional mutual funds, ETFs offer a cost-effective investment option.
Transparency
ETFs disclose their holdings monthly, providing investors with clear visibility into the underlying shares.
Indicative NAV
Indicative NAV, or iNAV, is a real-time estimate of the net asset value of an Exchange-Traded Fund (ETF). Unlike the traditional NAV, which is calculated at the end of the trading day, iNAV is continuously calculated and updated throughout the trading day. It gives investors a glimpse of the ETF's value based on the current market prices of its underlying assets. iNAV helps investors make informed decisions by offering a more immediate and dynamic assessment of the ETF's worth, helping in price discovery and facilitating trading activities. Keep in mind that while iNAV offers valuable real-time insights, it may slightly deviate from the ETF's official NAV calculated at the end of the trading day.
Frequently Asked Questions
ETFs trade on stock exchanges like individual stocks, with prices changing throughout the day. Mutual funds, on the other hand, are bought or sold at the end of the trading day at the net asset value (NAV).
No, ETFs cater to a wide range of investors. Their simplicity, diversification benefits, and low costs make them suitable for both beginners and experienced investors.
ETFs generally have lower expense ratios than traditional mutual funds. Investors may also incur brokerage, but many brokers offer commission-free ETF trades.
Yes, many ETFs can be bought on margin or sold short, offering investors the flexibility to implement different trading and investment strategies. However, it's essential to understand the associated risks.
No, while many ETFs track an index passively, some are actively managed, with fund managers making investment decisions to outperform the market. Investors can choose between passive and active ETFs based on their investment objectives.
The market price of an ETF is determined by supply and demand throughout the trading day. The net asset value (NAV), representing the total value of the underlying shares, is calculated at the end of each trading day.
Investors can hold ETFs for the long term. There's no predefined maturity date, and ETFs can be part of a buy-and-hold.
Product Label
- Bajaj Finserv Nifty 50 ETF (An open ended exchange traded fund tracking Nifty 50 Index)
- Bajaj Finserv Nifty Bank ETF (An open ended exchange traded fund tracking Nifty Bank Index)
Disclaimer
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.
- Bajaj Finserv Asset Management Limited has been referred to as Bajaj Finserv AMC.
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