Some broader types of ETFs:
- Stock ETFs: These ETFs track the performance of a particular stock market index, such as the S&P 500 or the NASDAQ., NIFTY, BANK NIFTY
- Bullish - Mostly traded US ETF TQQQ, COLD, BITO [BitCoin ETF], Indian ETF Nifty Bees, Bank Bees, Nifty IT,
- Bearish - When market falls this bearish US ETF get profits such as SQQQ, Bond ETFs: Invest into fixed income instruments like corporate bonds, government bonds (both state and central), bonds issued by banks, certificate of deposit, treasury bills etc.
- Sector ETFs: Designed to provide exposure to a particular industry, such as oil, auto, pharmaceuticals, FMCG etc
- Commodity ETFs: Invest in the price of a commodity, such as gold, crude oil etc
- Bullish - Natural Gas ETF COLD in US.
- Bearish - Natural Gas ETF BOIL in US.Currency ETFs – these are invested in a single currency or a basket of various currencies and are widely used by investors who wish to gain exposure to the foreign exchange market without directly trading futures or the Forex market. These exchange-traded funds usually track the most popular international currencies such as the U.S. dollar, Canadian dollar, Euro, British pound, and Japanese yen.
- Foreign market ETFs: Invest in foreign markets such as such as Japan’s Nikkei Index, Hong Kong’s Hang Seng index etc.
Characteristics of ETF:
- They are listed and traded on a stock exchange like common stocks. So, can be bought and sold at anytime of the day.
- ETF includes almost every investing asset class including commodities or currencies. It gives you exposure of any market, any sector in the world.
- Liquidity of ETF is very high and charge lower fees.
- Investors can place different types of order for buying ETFs like stop-loss order, buy on margin etc, as they are traded like stocks in market.
Best part of investing in ETF is, it gives you the flexibility to be any kind of investor that you want to be. It is very good investment instrument if you consider all factors to choose best ETF to achieve your investment goals.
Mutual funds
- Every investment plan has its own advantages regardless of its time period. In India, people are keen on investing in mutual funds as they are certainly safe and legal when compared with other investment plans, risks involved. Mutual funds helps investors to grow their wealth through investments.
- Mutual funds are a financial tool or companies that raise money from large numbers of people and invest it in stocks, bonds, or other assets. The combined ownership of shares, bonds or other assets held by the IMF is called a portfolio. Every investor in Mutual Funds has a unit that is part of this unit. Simply put, Mutual funds are certainly one of the most popular investment options in such a situation where having monetary value is a luxury, thanks to their ease of use.
- To many people, Mutual Funds can seem complicated or intimidating. Here in this guide, you will get to know everything about it at its very basic level. Essentially, the money pooled in by a the investors who share a common investment objective is what makes up a Mutual Fund. Investors invest money in financial securities. The funds that are pooled in are managed by a professional fund manager. The income generated from the investment is then distributed proportionately amongst the investors who made investment before after deducting expenses, by calculating a scheme’s “Net Asset Value or NAV.”
Types of Mutual Funds
Generally speaking, mutual fund types can be classified based on the following characteristics that are:
- Based on Asset Class Equity Funds
- Debt Funds
- Money Market Funds
- Balanced Funds
- Based on Structure Open-Ended Funds
- Closed-Ended Funds
- Interval Funds
- Based on Investment Goals Growth Funds
- Income Funds
- Liquid Funds
- Tax-Saving Funds
- Fixed Maturity Funds
- Pension Funds
- Specialized Mutual Funds
- Sector Funds
- Index Funds
- International/ Foreign Funds
- Global Funds