Mutual Funds Vs ETF Decoded in Brief: Here is what can make you richer
Just like Mutual Funds, ETFs (Exchange Traded Funds) are a very popular investment option. Both investment options have many similarities, but there are still a set of different features that make them equally important.
Just like Mutual Funds, ETFs (Exchange Traded Funds) are a very popular investment option. Both investment options have many similarities, but there are still a set of different features that make them equally important. With the difference in returns, investment standards, etc, both options have their own features. But the question is what are these differences? Which one is better to invest in? Where will you get more returns? Mutual Fund Expert Prakash Ranjan Sinha has shared a detailed analysis with Zee Business, which will help you understand both the instruments in detail and will help make you richer faster.
What is an ETF?
- ETF is an Extended Traded Fund
- ETF's portfolio includes a variety of securities
- ETF's generally provides equal returns to the index
- They are listed on the stock market, easy to sell and buy
Advantages of ETF
- A better alternative to ETF Direct stock trading
- Advisory and management fees are not required to be filled
- Tax liability in ETF is also significantly reduced
- Holding cost is also very low
- Get ETF certificate just like a stock certificate
What is Mutual Fund?
- Mutual fund companies raise money from investors
- These companies invest money in shares
- These companies charge investors to make them invest in an MF scheme
- Ideal for people who don't know much about investing in stock markets
- Mutual funds are always a good choice for such investors
- Investors can choose MF scheme according to their financial goals
Advantages of investing in MF?
- Mutual funds provide diversity and returns on risks involved
- One can also put money for a short period of time
- Mutual funds are managed by financial experts
- There are hundreds of mutual funds available
- Options of investing in a lump sum or SIP manner
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ETF Vs Mutual Fund
- There is not much difference between mutual funds and ETFs
- The way to manage both instruments is different
- An ETF can be traded like a stock
- Mutual Fund can be purchased at a calculated price
- The fund manager takes decisions in mutual funds
- ETFs are passively managed funds
- ETFs follow a market market index
Why ETFs don't pay more?
- Most people are not aware of ETF funds
- One can invest indirectly in the stock market via ETFs
- ETFs are a better alternative to direct stock trading
- ETFs are not better than equity mutual funds
Why ETF is better?
- ETF is better for long-term goals
- ETF gets better returns due to low spending
- ETFs provide high liquidity to investors
What is the Gold ETF?
- Gold Exchange Traded Funds are known as Gold ETFs
- It can be invested just like shares
- The price of Gold ETF is dependent on gold prices
- Trading and D-MAT accounts are required for investment in Gold ETF
- One can put his/her money at a lump sum or regular intervals in Gold ETF