Investment Planning

Benefits of investing in ETFs:

Diversification: ETFs offer you exposure to a wide range of securities like an index and are traded like a stock. ETFs help you spread investment risk over a number of securities and reduce stock-specific risk. Investment in ETFs can be looked at as a part of hedging strategy. Depending upon the ETF scheme, you can gain exposure to a range of stocks, countries. Sectors, commodities etc in a single transaction.

Transparency: Most of the ETFs track an index and this would mean passive management for the fund house to maintain the ETF portfolio. This makes it easier for the investor to know performance of the ETF.

Portfolio Management: ETFs help fund managers with constant inflow and out flow of funds. ETFs are liquid investment products that fund managers can easily buy or sell on exchange. This help in effective portfolio management for the fund managers.