vrushangshah93@gmail.com Meaning of ETF:
An Exchange-Traded Fund (ETF) is a type of investment fund that holds a basket of securities like stocks, bonds, commodities, or a combination.
ETFs are traded on stock exchanges, much like stocks, which means they can be bought or sold during market hours at market prices.
ETFs are often considered as a safe investment option compared to other options.
Rise of ETF in India:
Over the past decade, ETFs in India have experienced rapid growth, both in terms of the number of ETFs available and the total assets under management (AUM).
Investors have started to invest more in an ETF than investing directly in a particular stock. The ETF has given stupendous results as well.
Why are investors choosing an ETF?
(1) Cost effective investment: One of the biggest draws of ETFs is their low cost. The average expense ratio for an ETF is far lower than that of actively managed mutual funds.
This will be beneficial in the long term as they have to give minimum amount as expense ration compare to mutual funds.
(2) Liquidity & flexibility: ETFs are traded on stock exchanges, meaning that they can be bought and sold during market hours just like stocks.
This gives investors the flexibility to react quickly to market movements.
Why Silver & Gold ETF:
If an investor is planning to invest in gold and silver, ETFs can be a good option in comparison to physical gold and silver.
It is safe, no need for locker facility and no depreciation as well so overall it is beneficial for the Investor.
ETFs allow even a small investor to start with a few hundred in one’s pocket.
At the time of selling, they do not have to worry about deduction of the amount in the name of making charges as well.
Amid skyrocketing gold and silver prices, gold and silver rates today are roving around record highs. It would be highly risky to invest in gold and silver ETFs as they are already at a very high premium.
Reason why gold silver prices at record high:
(1) Global risks: Tensions are rising geopolitically and due to uncertainty of time, people are opting for safe haven asset.
(2) Market trends: Investors are buying Gold and Silver extensively and it has become a trend which is also a factor of increase in price rapidly.
As Gold and Silver prices are rising at a rocket speed, investors have to be cautious before buying or even selling.
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