ForumIAS announcing GS Foundation Program for UPSC CSE 2025-26 from 19 April. Click Here for more information.
ForumIAS Answer Writing Focus Group (AWFG) for Mains 2024 commencing from 24th June 2024. The Entrance Test for the program will be held on 28th April 2024 at 9 AM. To know more about the program visit: https://forumias.com/blog/awfg2024
Facts:
Exchange-Traded Fund (ETF):
- An ETF is a fund that comprises a group of stocks that are listed on an exchange and can be simply traded like any other listed security.
- Usually,ETFs are passive funds where the fund manager doesn’t select stocks on your behalf.The fund simply copies an index and endeavors to accurately reflect its performance.
- The ETFs trading value is based on the net asset value of the underlying stocks that it represents.
- The ETF is aimed at helping speed up the government’s disinvestment programme.
Benefits of ETF:
- Low Cost – The price of the ETF is based on the net asset value of the underlying stocks.Hence,the fund management fee of an ETF is much lower than that of a normal mutual fund scheme.
- Liquidity – The traditional mutual funds are only priced at the end of the day.But ETFs can be bought and sold at any time throughout the trading day.
- Low Risk:ETF allows investors to avoid the risk of poor security selection by the fund manager, while offering a diversified investment portfolio.
Additional information:
About Bharat-22 ETF:
- Bharat 22 is an ETF that will track the performance of 22 stocks of Central Public Sector Enterprises(CPSE), Public Sector Banks(PSB’s ) and strategic holding of SUUTI(Specified Undertaking of Unit Trust of India).
- The 22 stocks are diversified across six sectors such as(a) basic materials (b) energy (c)finance (d) FMCG (e) industrials and (f) utilities.
- Bharat-22 ETF is managed by the ICICI Prudential AMC while Asia Index is the index provider.
