Category Archives: ETF

Exchange-traded funds (ETFs) are well-known for their low costs and liquidity, but many investors ignore an additional, undervalued benefit of ETFs: tax efficiency. In this crucial aspect, ETFs outperform Mutual Funds by a long shot.   ETFs may owe this tax efficiency to their very structure and their trading, creation, and redemption. Structural components contribute to tax efficiency; lower turnover in passive strategies than active strategies, secondary market trading possibilities, and the structural tax advantages of in-kind redemptions.  As a result, ETF investors have more control over when they pay taxes, i.e., when they sell their shares, rather than when other shareholders buy and sell.   In the USA in 2018, only 10% of ETFs paid out capital gains to investors, but 61% of mutual funds did. Mutual funds paid an average of 4.5 percent capital gains as a percentage of NAV, while ETFs paid only 0.2 percent.   Source: pixabay How are ETFs so tax efficient 1. Passive turnover   According to Morningstar, only 4% of mutual funds are passive, compared to 89 percent of ETFs. Passive strategies, on average, have lower portfolio turnover than active methods.   As a result of the decreased turnover, there are fewer instances of securities selling at a profit, and hence fewer opportunities for shareholders to receive capital gains.   Thus, the very basis of the management of a fund leads to lower or higher tax efficiency. A passive ETF is more tax-efficient than actively managed ones, as passive strategies eliminate the need for continuous rebalancing.   2. Secondary market trading  Unlike mutual funds, exchange-traded funds (ETFs) get traded on stock exchanges. Only 10% of ETF trades affect the underlying portfolio through the primary market, with the rest occurring between investors in the secondary market.   On the other hand, all activity of mutual funds has to occur in the primary market, affecting the underlying portfolio.  When a mutual fund investor requests a redemption, the fund has to sell the securities to cover the obligation. On the other hand, when an individual investor wishes to sell an ETF, he simply sells it in the secondary market. For the ETF, there is no bother and so no capital gains transaction.  This structural difference limits the fund-level transactions. As a result, compared to mutual funds that invest in similar assets, this has a lower cost of ownership and higher returns.  ETFs vs Stocks Read More 3. Structure  Instead of selling securities for cash, the ETF issuer can satisfy redemptions and portfolio rebalance in-kind (exchanging securities for ETF shares) in the ETF primary market.   This in-kind transaction does not result in a taxable event for the fund. It can protect fund shareholders from capital gains from other shareholders' buying and selling decisions.  When an AP redeems ETF shares, the issuer does not immediately rush to sell ETF shares to pay the AP in cash. Instead, he's paid "in-kind" by delivering the ETF's underlying assets.   No capital gains, therefore. Additionally, the ETF provider selects the stocks to be given to the AP, making sure that the shares with the lowest tax liability are given to the AP.  This leaves the ETF issuer with only shares acquired at or even above the market rate, lowering the fund's tax burden and, as a result, providing investors with better after-tax returns.  For some ETFs, the mechanism does not augur well. Fixed-income ETFs are less tax-efficient than other ETFs due to higher turnover and recurrent cash-based creations and redemptions.   That said, ETFs win hands down, with two decades of evidence pointing out their high tax savings compared to any other investment avenue.  FAQs Are ETFs a good investment for a new investor? Exchange Traded Funds are usually considered to be low-risk investments as not only are they low-cost but also hold various stocks and securities, thus increasing diversification. What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. How to invest in ETFs? You can invest in ETFs using the EduFund App. All you need is a US account to start investing. Get started using this link Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

With the tremendous growth of the technology industry, tech stocks have established a solid footing in the stock market, making it an attractive yet challenging place for first-time investors.   ETFs (exchange-traded funds) can significantly simplify the investing process. ETFs tempt investors who want to minimize the risk of engaging in individual securities while generating income over time.   Tech industry exchange-traded funds (ETFs) trade in shares of electronics and information technology manufacturers and service providers, which make up the technology sector.   This industry's technological solutions vary from consumer items to enterprise software. These companies' stocks often trade at high earnings multiples compared to other sectors and have a history of driving market cycles.   Small-cap and microcap companies, as well as large-cap and microcap companies like Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Alphabet Inc. (GOOG), contribute to the sector's outlook and growth.  What are technology ETFs? Technology ETFs could be an excellent place to start for market players interested in investing in this industry. Continue reading to learn more about what you should know before buying a technology ETF.  There are roughly 110 technology ETFs in the United States, according to ETF.com. Some are focused on specific sectors, like artificial intelligence ETFs or fintech ETFs, but the Invesco QQQ Trust ETF is the largest technology ETF with remarkable capital gains (NASDAQ: QQQ).    It had US $195.26 billion in assets under management as of February 4, 2022.  Despite the generic nature of most tech ETFs, investors still have the option of selecting the market that most interest them. Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Meta Platforms (NASDAQ: FB) are among the most crucial tech businesses tracked by the iShares US Technology ETF (ARCA: IYW).  The PureFunds ISE Mobile Payments ETF (ARCA: IPAY), which tracks the mobile payments industry, is another ETF that monitors a specific market within the tech sector. PayPal (NASDAQ: PYPL), Mastercard (NYSE: MA), and Visa are among its top holdings (NYSE: V).  There are several high-performing options for investors wishing to obtain exposure to the lucrative semiconductor business, including the iShares Semiconductor ETF (NASDAQ: SOXX) and the VanEck Semiconductor ETF (NASDAQ: SMH), and the Direxion Daily Semiconductor Bull 3x Shares (NYSE AMERICAN: SOXL).  Source: pixabay Based on data obtained from the ETF database as of February 2022, some of the better ETFs are ParameterTechnology Select Sector SPDR Fund (XLK)First Trust NASDAQ Technology Dividend Index Fund (TDIV)ProShares S&P Technology Dividend Aristocrats Fund (TDV)IssuerState StreetFirst TrustProSharesPerformance Over One-Year12.6%11.8%10.5%Expense Ratio0.10%0.50%0.45%Annual Dividend Yield 0.67%1.78%1.11%Three-Month Average Daily Volume13,524,775106,04812,147Assets Under Management$45.9 billion$1.8 billion$110.7 millionInception DateDec. 16, 1998Aug. 13, 2012Nov. 5, 2019 XLK tracks the Technology Select Sector Index, broadly indicative of the S&P 500 Index's technology sector.   Companies involved in technology hardware, storage, peripherals; software; communications equipment; semiconductors and semiconductor equipment; and various related services are the focus of the fund.  TDIV follows the NASDAQ Technology Dividend Index, an index of technology and communications businesses listed on the NASDAQ, NYSE, or NYSE Amex.   Companies must meet minimum market capitalization, average daily dollar trading volume, and yield standards to be included in the index and have paid an ordinary dividend in the previous 12 months.  How ETFs are different from mutual funds? Read More TDV invests in the S&P Technology Dividend Aristocrats Index, which comprises well-established technology companies that have grown their dividends for at least seven years.   The index's companies have solid fundamentals and a successful growth and profitability track record. The data processing and outsourced services firms, semiconductors, and tech hardware, storage, and peripheral companies are the significant holdings of the large-cap growth fund.  Even if investors are unsure about market intricacies, tech ETFs can help them get started. They're seen as a safe and straightforward method to start in the industry, with a better chance of making a profit.   Market participants who want more control over their technology stock investments should go elsewhere. ETF shares don't provide much flexibility because they simply track an index or commodity. FAQs What are technology ETFs? Technology ETFs could be an excellent place to start for market players interested in investing in this industry. Continue reading to learn more about what you should know before buying a technology ETF. There are roughly 110 technology ETFs in the United States, according to ETF.com. Are ETFs a good investment for a new investor? Exchange Traded Funds are usually considered to be low-risk investments as not only are they low-cost but also hold various stocks and securities, thus increasing diversification. How to invest in ETFs? You can invest in ETFs using the EduFund App. All you need is US account to start investing. Get started using this link - https://edufund.in/us-market Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

ETFs (exchange-traded funds) are a straightforward method to begin investing. ETFs are easy to understand and can generate significant returns with little cost or effort.  Here is everything you need to know about ETFs, including how they work and how to do investing in US ETFs. What is an exchange-traded fund (ETF)?  An ETF, an exchange-traded fund, enables investors to buy many shares or bonds at once. Investors purchase ETF shares, and the funds are employed to invest in a specific way.   If you buy a Nasdaq 100 ETF, your money is put in the index's 100 companies. The ETF trading on the exchange is precisely like a regular stock.   Throughout the trading day, ETFs are bought and sold, and the price of an ETF share might swing above or below its net asset value (NAV) according to supply and demand.  Although ETFs and Mutual Funds appear to be similar on the surface, both are bundles of assets in which thousands of owners regularly invest; they have a few key differences.   Mutual Funds, for example, are usually actively managed. Unlike ETFs, which trade continuously throughout the day, mutual funds are transacted once daily.   Mutual fund prices are determined once every 24 hours based on the NAV at the end of the trading day.  ETFs have two categories: passive and active. Passive ETFs (also known as index funds) monitor a stock index like the S&P 500. Passive ETFs replicate the performance of an index. Active ETFs hire portfolio managers to invest their money. Active ETFs aim to outperform a benchmark index.  5 Steps on how to Invest in US ETFs The first step is to open an account with a brokerage firm. This account can be used to buy and sell stocks, ETFs, commodities contracts, and other securities. For all deposits, the broker acts as a custodian. A broker which provides services in India and the USA must be selected.  Make an ETF investment strategy that suits your goals and risk profile.  Once the investor decides on his investment strategy, he should focus on the ETFs. He should research the various types of ETFs available in the market.  The final step in the ETF purchase process is to purchase the ETF. The investor must first deposit monies into the brokerage account from which the purchase will be performed. After ensuring that the funds are sufficient, the investor must look for the ETF ticker symbol and make a buy order. The investor must also specify the number of ETF shares he wants to buy. ETF shares cannot be purchased in fractions in most cases. Confirm the order.   Since the investor has purchased the shares, he must prepare an exit strategy for minimizing losses (if any) or minimizing capital gains taxes.  What to look for in the ETFs before buying/investing?  Expense ratio: Expenses eat into the earnings of the investor, so the smaller the expense ratio, the better. In addition, an investor should consider the costs charged by an ETF to maintain a portfolio.  ETFs often have lower costs than actively managed funds since they track an underlying index. When purchasing specialty ETFs, however, an investor must use caution.  Volume: ETF volume reflects the ETF's trading potential and, as a result, its liquidity. Higher volume means lower spreads and more liquidity.  Underlying Holdings: Look at the underlying holdings of the ETF.   Performance: Look at the fund's past performance and compare that to its peers.   Market price: An ETF should ideally trade near its NAV. Before making any acquisitions, investors should consider the NAV.   Beta: Beta measures how much security is likely to go up or down daily concerning the tracking Index. It is, in essence, a measure of a security market or systemic risk.   For example, a stock having a beta =1.0 swings in tandem with the general market, so a 1% increase or decrease in the underlying index is mirrored by a 1% gain or fall in the ETF's price.  Alpha: Alpha is referred to as 'excess return', which measures the return earned by a stock above or below the market's demand for its risk class.  Age of the ETFs: The age of the fund can be used as a proxy for the reliability of the fund. A fund that has been around for a considerable time must have a proven track record.   Why should you invest in US ETFs?  All key US stock exchanges have companies listed worldwide, making it a potential investment destination. If you invest in the US share market, you diversify your financial portfolio while investing in worldwide companies.   The equity market in the United States is the largest in the world. The US financial markets accounted for 54.5 percent of worldwide stock market value as of December 2021.  Investments in US stocks can help you get a good return on your money because global corporations are there, and the return you receive will be high due to various factors.  Unlike India, you can hold US stocks in fractions. After all, buying a single Google share is out of range for most individuals. You can own a part of the company for as little as Rs 1,000 or even less.  According to historical data, the Indian Rupee has been losing value against the US dollar, and there is a probability that this trend may continue.  The rupee-to-dollar exchange rate influences the profit you make from foreign equities. Any rupee weakening helps boost profits if dollar-denominated investments such as US shares appreciate.   Even if global markets are disappointed or remain steady, you benefit if the rupee falls against the dollar.  How to send money to the United States?  All residents, including minors, are entitled to freely transmit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction, or a combination of both, under the Liberalized Remittance Scheme.  Furthermore, residents can use the foreign exchange facility for up to USD 2,50,000 for the purposes listed in paragraph 1 of Schedule III of the FEM (CAT) Amendment Rules 2015, dated May 26, 2015.  Indian residents can use the LRS to send money overseas for tourism, education, medical treatment, stock and property purchases, care of family living abroad, presents, and donations.   Individuals may also create, manage, and retain foreign currency deposits with foreign banks to conduct transactions. The scheme does not cover corporations, partnerships, trusts, etc.  All about taxation when investing in the US Market Let us sum up the taxation aspect in an easy-to-understand flowchart  1. Dividends  An intended distribution of a company's profit to its shareholders is known as a dividend. You must thus pay the tax on the dividend you receive because your investment is lucrative.  2. Capital gains on the sale  You can choose to make money or lose money when you sell a stock. If you experience a loss, no tax is owed; but, if you experience a profit, you must pay capital gains tax.  The capital gains tax rate is based on how long the stock has been held. Foreign investors in US stocks are not subject to the country's capital gains tax. However, the Capital Gains Tax plan in India requires you to pay taxes.  a) Long-Term Capital Gains Tax Rate (LTCG)  If you own a stock for more than 24 months, the profit from selling it would be taxed at the Long-Term Capital Gains rate in India. Long-term capital gains are taxed at a rate of 20%. (Plus, any additional surcharge and cess).  b) Short-Term Capital Gains Tax Rate (STCG)  If a sale is made before the 24-month period, it will be considered normal income, and the tax rate will depend on your tax bracket.  Understanding some critical ETF terms  Smart Beta ETFs - "Factor-based" or "Strategic Beta" ETFs are other names for Smart Beta ETFs. These ETFs wisely select their underlying assets in keeping with their namesake.  These ETFs choose the primary assets based on factors other than market capitalization.  ETF liquidity - 2 different types of allied liquidities - Primary and Secondary.  Primary Liquidity is the Liquidity associated with the ease of creating and redeeming ETF shares with the help of underlying securities.   The Liquidity of the underlying securities plays a significant role in determining the Liquidity of the ETF shares in the primary market.  Secondary Liquidity is the Liquidity associated with the already created ETF shares in the stock market. This Liquidity is generally the visible Liquidity on the market.   The non-institutional investors or investors with a smaller scale of operations generally are concerned with this type of liquidity. Investors buy and sell ETF units on the secondary market without the involvement of the ETF issuer.  Tracking difference - which can be either positive or negative, indicates how well a fund has outperformed or underperformed its benchmark index.   It's derived by subtracting the fund's total return from the benchmark's total.  Tracking error - reflects how much variability occurs among the individual data points that make up the fund's average tracking difference.  The value of a fund's assets subtracted the value of its liabilities is known as net asset value (NAV). The term "net asset value" is frequently used in the context of mutual funds and ETFs, and it refers to the value of the assets owned in the fund.  If the ETF's price is higher than its NAV, it is considered to be trading at a "premium." In contrast, if the ETF's price is below its NAV, the ETF is considered to be trading at a "discount." Spread - At any given point in the market, there are two prices: the sale price, i.e., 'ask' and the other to buy, i.e., 'bid'. Buyers of ETFs aim to pay a fair price and, if possible, a discount on the market price of the core securities in the ETF, while sellers want to get the highest price -leading to the existence of spreads.   International investments allow you to diversify your portfolio and acquire exposure to new markets. Geographic diversification can help mitigate country risk, such as the chance of bad events affecting India's domestic economy.   Furthermore, when comparing investing in Indian vs US markets, US stocks have traditionally displayed lower volatility, higher returns, and greater foreign exposure.  FAQs What is an exchange-traded fund (ETF)? An ETF, an exchange-traded fund, enables investors to buy many shares or bonds at once. Investors purchase ETF shares, and the funds are employed to invest in a specific way.   If you buy a Nasdaq 100 ETF, your money is put in the index's 100 companies. The ETF trading on the exchange is precisely like a regular stock. What to look for in the ETFs before buying/investing?  There are many parameters to look out for while buying an ETF: performance, expense ratio, volume, market holdings, age of the ETFs, etc. What are the two types of ETFs? ETFs have two categories: passive and active. Passive ETFs (also known as index funds) monitor a stock index like the S&P 500. Passive ETFs replicate the performance of an index. Active ETFs hire portfolio managers to invest their money. Active ETFs aim to outperform a benchmark index.  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

"Man is not what he thinks he is; he is what he hides." ― André Malraux.  Similar is the case with our ETFs. ETFs are not what they seem to be. Several ETFs are named similarly, which is often deceptive to a layman investor.  Investors must evaluate a variety of variables while choosing the right ETF. ETFs' costs, tracking, structure, and liquidity are all critical. Even with these factors in place, an ETF's results primarily depend on the underlying assets at the end of the day.  This article aims to help the investor know the nitty-gritty of the ETF nomenclature and why an investor should not go by just the name of the ETF and should also check under the hood.   Let's take an example and understand why this is the case. Let's take 2 ETFs tracking emerging markets:  iShares Core MSCI Emerging Markets ETF (IEMG)   iShares MSCI Emerging Markets ETF (EEM).  ParameterIEMGEEMTickeriShares Core MSCI Emerging Markets ETF (IEMG)iShares MSCI Emerging Markets ETF (EEM)IssuerBlackrockBlackrockExpense Ratio0.11%0.68%AUM$74.02B$27.94BAverage Daily $ Volume$965.69M$2.10BUnderlying IndexMSCI Emerging Markets Investable Market IndexMSCI Emerging Markets IndexMedian Tracking Difference (12 Mo)-0.40%-1.08%5-year annualized performance7.24%6.44% Country-wise holdings:  Source: etf.com Source: etf.com Sectoral weightage:  Source: etf.com Source: etf.com The above two funds are very similar, yet they are slightly different and have given separate returns over the same period. The two funds track emerging markets and also follow the same market classification given by MSCI.   Still, they have different tracking indices, which differ very slightly. As seen above, IEMG tracks the MSCI Emerging Markets Investable Market Index, and the EEM tracks the MSCI Emerging Markets Index, which are two different indices with almost the same name!  Direct equity vs Investment in mutual funds? Read More The case was not very severe in our example; what if the two ETFs tracking very similar markets gave drastically different returns?   Frontier markets made a big impression in 2013, outpacing the BRICs and other developing markets by a wide margin. Frontier markets are developing-world capital markets that are less developed.  Because it is too tiny, has too much inherent risk, or is too illiquid to be termed an emerging market, a frontier market is a country that is more established than least developed countries (LDCs) but yet less established than emerging markets. Pre-emerging markets are another name for frontier markets.  ETFs investment strategy for Beginners Read More The iShares Frontier 100 ETF (FM) and the Guggenheim Frontier Markets ETF are the two broad frontier market ETFs currently available (FRN).  You'd believe they're the same fund because they both claim to have broad exposure to frontier markets.   However, if you had invested in the wrong one, you would have had no idea that frontier markets performed well in 2013. FM returned over 25% in 2013, whereas FRN returned -13 %. That's a 38 percent difference in returns between the two funds!  FRN uses the BNY Mellon classification system and is only allowed to retain depositary receipts. As a result, the underlying basket gives you access to nations like Chile, Colombia, Egypt, and Peru, which account for more than 70% of FRN's weighting, even though MSCI, FTSE, and S&P all classify them as emerging.   Meanwhile, FM adheres to MSCI's classification system and is authorized to hold local securities - this gives FM a preference for Saudis like Kuwait, Qatar, and the United Arab Emirates, as well as African nations like Nigeria and Kenya.  The lesson here is to not assume that a fund will cover a country, sector, location, or theme precisely as you think based on its name. Checking under the hood is the key!  FAQs What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. Are ETFs a good investment for a new investor? Exchange Traded Funds are usually considered to be low-risk investments as not only are they low-cost but also hold various stocks and securities, thus increasing diversification. How to invest in ETFs? You can invest in ETFs using the EduFund App. All you need is a US account to start investing. Get started using this link Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

So, why do we need to know the difference between exchange-traded funds and mutual funds in the very first place? ETFs are very similar to Mutual Funds, but they are not mutual funds. It's just a matter of grasping the differences between the two.   We at EduFund believe that understanding where each of the instruments makes the most sense, and the investor just doesn't blindly follow the crowd and the trend.  At the very outset, let's know why they are so similar before diving into their differences. Exchange-Traded Funds and Mutual Funds represent a basket of professionally managed securities, such as stocks, bonds, currencies, commodities, real estate, etc.   These securities can either be thematic or also depend upon the type of mutual fund or the ETF you chose. Both offer various investment options and are managed by professional portfolio managers.   Thus, saving our time and energy in research.  The ETFs and Mutual funds are highly diversified because of the basket of securities. Thus, they are less risky than investing in individual securities like stocks, bonds, commodities, currencies, etc.   How does this help reduce risk? Imagine if you are holding stock that is performing poorly, and thus your return will also be poor; perhaps you may lose money too.   However, suppose you have an ETF or a mutual fund. In that case, this poor performance of that stock may be overdone by the good or average performance of other stocks and assets, which will give you a better return than holding a single asset otherwise.  The most important difference between ETFs and Mutual funds is that an ETF is tradeable on the stock exchange, i.e., its trading is just like a simple stock on the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) if it's traded in Indian markets or it will be listed on the New York Stock Exchange or the Nasdaq if it's to be tradeable in the United States of America.   On the other hand, Mutual Funds’ listings are not done on the stock markets; they must be purchased manually from the fund either through your financial advisor or through online brokers.  The ETFs are easily translatable, i.e., they can be sold or purchased at any point in the day, just like a stock. However, for mutual funds, this happens only once during the day after the market has closed.   This buying or selling of mutual funds is through the mutual fund company based upon the investor's instructions - this delay can be very costly if the market fluctuations are very dynamic.   While easy and anytime trading of ETFs sounds cool, not all ETFs are as tradable. This leads to illiquidity concerns.  Source: Pixabay Generally, an investor purchases the mutual fund at the price of its NAV, but on the other hand, ETFs are bought at the prevailing market price, which is typically near the NAV but not the same.   Hence, most mutual funds allow automated transactions but ETFs do not because of price volatility.  Generally, ETFs have a lower expense ratio as compared the mutual funds. The expense ratio is the fee you pay the manager for managing your securities.   The reason is quite simple when a mutual fund is traded, it leaves a long paper trail, and thus the exchange of hands for this paperwork is more - translating to higher costs for the fund manager, which are imposed upon the investor.   On the contrary, ETFs are traded directly by the investor and thus naturally explain the lower charges.  Based on management, most ETFs are passively managed, whereas there are quite a few mutual funds that are actively managed, but some are passively managed.  What is better?  Well, neither of the two is perfect! You can achieve diversity using any of the two options based on your goals. Naturally, a portfolio balanced by combining both offers greater variety and lower risk.   Notably, there is no reason this must be a tightrope walk situation. Both Mutual Funds and ETFs can live together in a portfolio happily. FAQs Which is better - Mutual Funds or ETFs? Well, neither of the two is perfect! You can achieve diversity using any of the two options based on your goals. Naturally, a portfolio balanced by combining both offers greater variety and lower risk.   What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. What is a Mutual Fund? A mutual fund is a financial trust that collects funds from investors and invests them into different instruments like stocks, bonds, and other money market instruments. How to invest in a Mutual Fund via the EduFund App? Step 1: Log in to the EduFund website or the EduFund app.   Step 2: Complete your KYC and move ahead to create your investment account.   Step 3: Choose the option of mutual fund investments.   Step 4: Analyse your risk profile on the app by answering your household income and expense, the number of dependents you have, the highest level of maturity you have in terms of investments, your period of investment, and similar questions.  Step 5: After answering the above questions, you will know what type of investor you are and the degree of risk you might be willing to take.   The EduFund website or the EduFund app will suggest some mutual funds you might want to invest in, with a recommended SIP value.  Step 6: Choose the fund and start investing. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed the types of ETFs. In this article, we will discuss how much exposure ETFs provide. Exchange-traded funds are a lot like millennials: Born in the early 1990s, it didn't become relevant until after the recession of 2007-09, but it's been a force to be reckoned with ever since.   ETFs in the United States had $530 billion in assets in 2008. Today, that figure is estimated to be around $4.37 trillion.  Most investors today choose ETFs to tap into the underlying advantage of diversification that comes with it. Some investors also choose ETFs to access certain asset classes or investment patterns.   For instance, investors who want to preserve their capital will try to invest in bond ETFs and investors who want exposure to blockchain will invest in blockchain-exposed ETFs.   As a result, investors must understand what an ETF owns and how it came to own the securities in its portfolio. There are 63 different broad-based US large-cap ETFs to choose from.   Investors may feel they are all the same because they all draw from the same universe of 300 or 500 if you consider the S&P 500 a large-cap index of US-listed stocks, but this is a risky assumption.  ETFs can have various strategies of exposure to specific underlying indices.   Equally weighted ETFs   Equal-weighted indexes are precisely what they sound like. Regardless of how big or small a firm is, every stock in the index has the same weight.  As a result, even Apple will have the same weight as the tiniest business in the S&P 500. The Invesco S&P 500 Equal Weight ETF (RSP) is the most widely traded equal-weight ETF.  Let's take an example and construct an equal-weighted ETF  StockReturn (in %)Equal weightContribution Equal Weight (return*equal weight)A4100.4B3100.3C7100.7D4100.4E12101.2F3100.3G1100.1H15101.5I-510-0.5J2100.2TOTAL 10015.4% Thus, the return of our hypothetical ETF is 15.4%  Market weighted ETFs  Like many other stock indices, the S&P 500 is a market capitalization-weighted index. By multiplying the share price by the total number of outstanding shares, the market capitalization of each stock is determined.  The index's weightings will be dependent on the companies with the most significant market capitalizations or values.  While the S&P 500 index comprises several companies, the MWI (market value-weighted index) sector weight is calculated by adding the individual weights of the companies which will make up that sector.  Let's take an example and construct a market-weighted ETF  StockReturn (in %)Market weightContribution Equal Weight (return*equal weight)A4100.4B3200.6C750.35D4150.75E1250.6F350.15G1100.1H15101.5I-510-0.5J2100.2TOTAL 1004.15% Thus, the market-weighted ETF return is 4.15%.   Volatility weighted ETF  Volatility weighting, in particular, does not use low volatility as a selection criterion.   It's a weighting strategy that helps an index diversify by addressing the concentration in cap-weighted indices when a few stocks dominate the index's performance and risk profile.   The objective is to use a company's stock price volatility over the last few trading days to inversely weigh shares. Based on that metric, the least volatile equities are weighted more while the most volatile stocks remain in the portfolio with a lesser weight.  Financial Goals for Millennial Parents Read More Fundamentally weighted ETF  The components of a fundamentally weighted ETF get their rankings according to their fundamentals rather than their market capitalization.   As a result, the ETF only invests in equities that have the prediction to show increased growth.  This ensures that the organizations with the best results in their core business operations receive the most weight, rather than those whose market value has increased.   A constant upward trend in the top line is one of the essential components of a company's long-term growth.  Thus, being cautious about exposure and not going by the name blindly will help select ETFs for the portfolio. FAQs What is the risk exposure of ETF? Most investors today choose ETFs to tap into the underlying advantage of diversification that comes with it. Some investors also choose ETFs to access certain asset classes or investment patterns. For instance, investors who want to preserve their capital will try to invest in bond ETFs, and investors who want exposure to blockchain will invest in blockchain-exposed ETFs. As a result, investors must understand what an ETF owns and how it came to own the securities in its portfolio. Is ETF safer than stocks? Since ETFs are diversified, which means they hold a basket of stocks or other securities, they carry less risk compared to stocks. But ETFs can be bought and traded like stocks. Do ETFs try to beat the market? Most ETFs and index funds try to replicate an index of stocks or other assets. They try to imitate the index and try to match its returns. Does ETF really work? ETFs are generally considered low-risk investments. They are low-cost and offer diversification because they hold a basket of stocks or other securities. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

So far, 2021 has been kind to investors, with significant market indices finishing the year in the green zone. The S&P 500 and Dow Jones Industrial Averages have risen roughly 27% and 10%, respectively.   From the beginning of the year to 6 months, the Nasdaq Composite surged 22%, whereas the Russell 2000 went up about 14%.  Due to soaring inflation, fatal variations spawning new waves of the COVID-19 epidemic, and supply-chain bottlenecks resulting from pandemic-related restrictions, markets remained unpredictable in 2021.   The Federal Reserve's continued assistance, on the other hand, aided the economy's recovery from the pandemic-induced downturn. The Omicron variant fears have died, and a new conflict between Russia and Ukraine has risen out of the blue.   According to etf.com, investors will rotate to some of the more than 200 thematic ETFs offered by more than a dozen asset managers, which cover a wide range of long-term trends like blockchain, cannabis, cleantech, healthcare innovation, mobile payments, and resource scarcity.   By 2022, thematic ETFs, which are actively managed, will account for 10% of equities net inflows.  There are a few sectors to watch out for in 2022 if an investor wants to invest in ETFs.   Consumers have been fighting growing inflation and COVID-19 variation worries for a long time. Consumers are optimistic about the quick circulation of the coronavirus vaccine and the recovery of the U.S. economy from pandemic-related slumps.   The retail sector was bustling with potential because of high levels of consumer expenditure and rising employment conditions. Thus, the retail industry is sure to boom, and therefore the retail ETFs.  Given the strong trends, investors may consider investing in the retail ETFs below to take advantage of the sales surge. SPDR S&P Retail ETF XRT, Amplify Online Retail ETF IBUY, VanEck Retail ETF (RTH), and ProShares Online Retail ETF (ONLN).  Source: Pixabay Another key sector is the Energy sector. Investors are keeping a careful eye on the energy sector, which is showing signs of revival as world consumption and growth of the economy return to pre-pandemic levels.   Introducing a coronavirus vaccination is slowing the global spread of the coronavirus outbreak. cyclical industries are looking up thanks to the opening of world economies and rising demand.  Invesco Dynamic Energy Exploration & Production ETF PXE, Vanguard Energy ETF VDE, Fidelity MSCI Energy Index ETF (FENY), The Energy Select Sector SPDR Fund (XLE), and iShares U.S. Energy ETF are some of the options available to investors (IYE).  The semiconductor industry has been attracting investors' attention for a long time due to its promising future. WFH and internet-based learning trends fueled demand for processors among Computer manufacturers and data-center operators, thanks to the coronavirus.   Huge public cloud providers are investing in Hybrid cloud because of its growing importance among businesses. This development will most likely benefit data-center chip manufacturers.  Investors should evaluate the iShares Semiconductor ETF SOXX, VanEck Semiconductor ETF SMH, First Trust Nasdaq Semiconductor ETF (FTXL), Invesco Dynamic Semiconductors ETF (PSI), and SPDR S&P Semiconductor ETF (XSD) in light of current market conditions.  Bank ETFs are another set of thematic ETFs that should be considered. The Federal Reserve's decision to reduce its monthly bond purchases could help expand the market. The move to tighter monetary policy will raise yields, which will benefit the financial sector - because higher interest rates will assist banking institutions, insurance firms, discount brokerage houses, and asset managers make more money. The yield curve (the differential between long- and short-interest rates) might become narrow, which will help banks' net interest margins. As a result, the steeper slope of the yield curve and a minor increase in loan demand are expected to boost the net interest margin, accounting for a significant portion of bank profits.   Invesco KBW Bank ETF KBWB, SPDR S&P Regional Banking ETF KRE, iShares U.S. Regional Banks ETF (IAT), and SPDR S&P Bank ETF (KBE) are some ETFs to be looked out for.  In 2022, the renewable energy sector has the potential to continue to grow. Government regulations that promote renewable energy, significant renewable investment, lowering total costs of generating renewable electricity, and increased usage of electric vehicles (E.V.) may all contribute to space's momentum in 2022.  iShares Global Clean Energy ETF, Invesco Solar ETF, First Trust NASDAQ Clean Edge Green Energy ETF, ALPS Clean Energy ETF, and Invesco Global Clean Energy ETF are some of the ETFs to be examined.  These sectors should be kept in mind while investing in ETFs.  FAQ Is ETF a good investment?   ETFs are generally considered low-risk investments. They are low-cost and offer diversification because they hold a basket of stocks or other securities.     Which is safer ETFs or stocks?   Since ETFs are diversified, which means they hold a basket of stocks or other securities, they carry less risk compared to stocks. But ETFs can be bought and traded like stocks.      Should beginners invest in ETFs?   ETFs are easily traded on the stock market, and they invest in stocks and different other assets. One thing to remember is that most of the ETFs are passively managed. It is wise to talk to saving experts before investing in ETFs for beginners.   Is it risky to buy ETF?   Most investors today choose ETFs to tap into the underlying advantage of diversification that comes with it. Some investors also choose ETFs to access certain asset classes or investment patterns.     For instance, investors who want to preserve their capital will try to invest in bond ETFs, and investors who want exposure to blockchain will invest in blockchain-exposed ETFs.     As a result, investors must understand what an ETF owns and how it came to own the securities in its portfolio.     Since ETFs are diversified, which means they hold a basket of stocks or other securities, they carry less risk compared to stocks.   Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

ETF investment strategy is new to India. In fact, the first successful ETF was introduced in 1993 in the United States to monitor the Standard & Poor's 500 Index (S&P 500), and it is still one of the most popular ETFs today. In India, the first ETF to track the Nifty 50 Index came to the market in 2001. ETFs are a low-cost, low-risk way to invest.  Since it tracks a specific index, such as the NIFTY 100 or S&P 500, and is passively managed. An exchange-traded fund (ETF) is similar to an index mutual fund.   However, today's market has a large number of actively managed ETFs. ETFs, unlike index funds, are marketable securities that may be bought, sold, and traded at an exchange throughout the day, just like any other corporate stock.  Benefits of investing in ETFs ETFs offer liquidity as they are tradable securities on the exchange;  ETFs are very cost-efficient compared to their mutual fund counterparts due to their structure and functioning; ETFs offer unparalleled flexibility due to traceability advantages;  ETFs offer diversification to the portfolio;  ETFs are single transaction securities; when an investor buys a mutual fund, he or she buys a basket of equities made up of small shares spread across various assets. When ETFs are bought in a single transaction, it is akin to owning a tiny portfolio it is beneficial to investors who are keeping track of their performance;  Unlike some mutual funds, ETFs do not have lock-in periods.  ETFs are tax-efficient  Passive management helps get transparent returns akin to the underlying index.   Source: Pixabay Four ETF investment methods 1. Cost-per-dollar Averaging  You acquire assets worth a specific amount of money regularly, regardless of how the asset's price changes. Even if it's a modest amount, if you're new to US investing, you should strive to save a regular amount in an ETF or a set of ETFs every month.   This aids in the development of saving discipline. The goal is to spend time in the market rather than trying to time it.  For instance, using DCA, a $200,000 investment in shares can be made over eight weeks by investing $25,000 each week in the same manner. The trades for lump-sum investing and the DCA approach are in the table below:   DCA @ $25000 per weekLumpsumWeekShare priceNo shares purchasedShare priceNo shares purchased185294852353286291  383301  481309  582305  678321  780313  882305  Total shares purchased 2437 2353Average share price82 85  The entire amount invested is $200,000, with 2,353 shares purchased as a lump-sum transaction. On the other hand, the DCA strategy purchases 2,437 shares, a differential of 84 shares worth $6,888 at the $82 average share price.   As a result, DCA can raise the number of shares purchased when the market is down and decrease the number of shares purchased when the market is up.  2. Asset Allocation  Simply put, you should not invest all your money in a single asset group. Instead, you spread it over various asset classes, such as equities, bonds, and commodities.   ETFs can assist a novice in putting together a basic portfolio allocation. The asset allocation you make should be based on your risk tolerance. When you're in your twenties, for example, stock ETFs may make up the bulk of your portfolio as you have more time on your hands.   You might choose to implement a less aggressive policy as you age and your goals change by increasing the proportion of your assets in bond ETFs.  3. Sector Strategy  ETFs are a great method to gain access to a sector that otherwise would be hard to enter. For example, the ARK Autonomous Technology & Robotics ETF can help you gain exposure to the technology and robotics sectors.   You can also invest in the ALPS Clean Energy ETF if you wish to invest in the clean energy sector. It also allows you to perform a sector rotation, in which you can earn gains from one ETF and switch to another based on economic cycles – this is especially useful in cyclical businesses.  Emerging Marketing ETFs Read More 4. Global Diversification  ETFs also allow you to diversify your portfolio regionally and in global markets other than the United States. The Invesco China Technology ETF, for example, tracks the performance of the FTSE China Incl Index.   Tencent Holdings Limited and Baidu Inc. are the firms represented in this 25% Technology Capped Index.   The iShares MSCI Japan ETF monitors the performance of an index of Japanese stocks, with Toyota Motor Corporation and Sony Group Corporation among its holdings. Investing in the United States and other countries allows you to build a global portfolio.  ETFs are a solid long-term investment alternative because they have a lesser expense ratio than active funds. Hence going with them makes the most sense. FAQs What are the benefits of investing in ETFs? Here are the benefits of investing in ETFs - ETFs offer liquidity as they are tradable securities on the exchange;  ETFs are very cost-efficient compared to their mutual fund counterparts due to their structure and functioning; ETFs offer unparalleled flexibility due to traceability advantages;  ETFs offer diversification to the portfolio; What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. How can you invest in ETFs from India? You can invest in ETFs in India via EduFund App. You can download the App and set up a US account to start investing. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we talked about what is healthcare ETF. In this article, we will discuss what is innovative ETF. Many organizations' business models include acquiring fresh perspectives through research and then using those findings to develop and execute new technologies.   Much of these efforts are expected to be in the medical sector, which will have a significant economic impact and spread. The same is true about digital technology, which will likely result in a complete makeover of different sectors like supply chain and sales processes.  Why invest in Innovative ETFs? Innovation propels the global economy. New exchange-traded funds (ETFs) were put out in the market to provide exposure to companies that have developed new goods, patents, or technology.   Index providers assess firms based on their innovation objectives and create unique indices based on this data. Some ETFs which enable you to invest in emerging technology are enumerated in this investment guide.  All ETFs that allow you to invest in innovative technology is on this list.  Innovative ETFs manage $233.55 billion in assets management through 91 ETFs trading on US exchanges. The expense ratio is 0.69 percent on average.  With $182.04 billion in assets, the Invesco QQQ Trust QQQ is the largest Innovative ETF. The best-performing Innovative ETF in the previous year was IEFN, which returned 20.26 percent.   The WisdomTree Battery Value Chain and Innovation Fund WBAT was the most recent ETF in the Innovative category.  List of Top 10 Innovative ETFs Here is a list of the top 10 ETFs based on their AUM. AUM is the Assets Under Management which means the total market value of the investments that a person or entity handles on behalf of investors.   TickerFund NameIssuerAUMExpense ratio3-month TRSegmentQQQInvesco QQQ TrustInvesco$182.04B  0.20%-11.83%Equity: U.S. - Large CapARKKARK Innovation ETFARK$11.99B00.75%    32.77%Equity: Global Broad ThematicFDNFirst Trust Dow Jones Internet Index FundFirst Trust$7.19B  0.51%-18.31%Equity: U.S. InternetKWEBKraneShares CSI China Internet ETFCICC$6.94B0.76%-18.29%Equity: China InternetQQQMInvesco NASDAQ 100 ETFInvesco$3.69B0.15%-11.71%Equity: U.S. - Large CapARKWARK Next Generation Internet ETFARK$2.38B0.83%-34.31%Equity: Global InternetBOTZGlobal X Robotics & Artificial Intelligence ETFMirae Asset Global Investments Co., Ltd.$2.09B00.68%  -18.31%Equity: Developed Markets Robotics & AIROBOROBO Global Robotics and Automation Index ETFExchange-Traded Concepts$1.65B00.95%  -11.82%Equity: Global Robotics & AIARKQARK Autonomous Technology & Robotics ETFARK$1.56B0.75%-18.51%Equity: Global Robotics & AIARKFARK Fintech Innovation ETFARK$1.53B0.75%-34.75%Equity: Global FinTech Now let us look at the top and bottom performers.  Top ETF Performers according to etf.com  Bottom ETF Performers, according to etf.com  Innovation is the very backbone of our society; thus, it's bound to grow in the future and give handsome returns in the long run.   Investments in innovative ETFs are perfect for those who belong to the 'buy and hold' type of investor category and have long-term goals. FAQs Are ETFs a good investment for a new investor? Exchange Traded Funds are usually considered to be low-risk investments as not only are they low-cost but also hold various stocks and securities, thus increasing diversification. Why invest in innovation ETFs? Innovation is the very backbone of our society; thus, it's bound to grow in the future and give handsome returns in the long run.  Investments in innovative ETFs are perfect for those who belong to the 'buy and hold' type of investor category and have long-term goals. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT

If you want to invest in healthcare, buying a healthcare ETF is the easiest way to get started without studying individual firms.  Healthcare ETFs invest in a diversified portfolio of stocks from firms that provide medical services, manufacture medical equipment, and medications, provide medical insurance, or help patients access healthcare.  United Health Group Inc. (UNH), Pfizer Inc. (PFE), and Merck & Co. Inc. are three significant healthcare businesses.  The healthcare industry is noncyclical since most medical services and goods are essential rather than discretionary expenditures.   Why should you invest in the Healthcare Industry? Healthcare has a lot of room for expansion. As individuals live much longer than before, medicine faces a slew of diseases to combat, including cancer, heart disease, Alzheimer's disease, stroke, and various other ailments.   This also includes combating new-age diseases like COVID-19 and illnesses that have yet to be discovered. In addition, healthcare spending in the United States has been above planned expenditure.   According to Peterson-Health KFF's System Tracker, medical spending per capita increased by 3.7 percent yearly from 2010 to 2019, compared with 3.4 percent for the US economy. As a result, healthcare ETFs can be a good fit for a defensive portfolio.  You can acquire a broad spectrum of the healthcare sector or even narrower areas with a healthcare ETF. After evaluating your goals, find the group of stocks you want to own in either case.   Unlike buying individual companies, an ETF also provides diversity and helps in lowering your risks. Since the healthcare industry is broad, the division is possible into sub-sectors based on the kind of firms that operate within it.   Except for geared ETFs and funds with under $50 million in assets under management, the healthcare ETF universe consists of around 34 different ETFs that trade in the United States (AUM).   So, you can invest in healthcare in a variety of ways, and a healthcare ETF can offer exposure to some of the following sectors:  How to choose a healthcare ETF?   Here are some parameters to consider before selecting an ETF: Sub-sector exposure Track record of the ETF Expense ratio With $33.95 billion in assets, the Health Care Select Sector SPDR Fund XLV is the largest Healthcare ETF. The best-performing Healthcare ETF in the previous year was LABD, which returned 105.54 percent.   The PSYK ETF PSYK was the most recent Healthcare ETF to be launched on 31 January 2022.  Top ETF performers according to etf.com.  TickerFund NameTrailing 30-days price TR changeBISProShares UltraShort NASDAQ Biotechnology7.14%XHESPDR S&P Health Care Equipment ETF5.62%XHSSPDR S&P Health Care Services ETF3.36%LABDDirexion Daily S&P Biotech Bear 3X Shares3.27%PSCHInvesco S&P SmallCap Health Care ETF2.46% Bottom ETF performers, according to etf.com.  TickerFund NameTrailing 30-days price TR changeLABUDirexion Daily S&P Biotech Bull 3X Shares-14.97%PSILAdvisorShares Psychedelics ETF-9.14%PSYDefiance Next Gen Altered Experience ETF-8.24%BIBProShares Ultra NASDAQ Biotechnology-8.09%CNCRLoncar Cancer Immunotherapy ETF-4.92% If you want to invest in healthcare, you have a few possibilities based on the sub-sector that you want to focus on. If you're unsure which one to buy, you can buy an ETF that tracks the entire industry and acquire overall exposure.   While you don't need to be an expert in investing in an ETF, some investors prefer to stick to diversified asset index funds, like those built on the S&P 500 index, leaving trading and fund selection to the professionals.  FAQs What are healthcare ETFs? Healthcare ETFs invest in a diversified portfolio of stocks from firms that provide medical services, manufacture medical equipment, and medications, provide medical insurance, or help patients access healthcare. United Health Group Inc. (UNH), Pfizer Inc. (PFE), and Merck & Co. Inc. are three significant healthcare businesses. What is the best-performing healthcare ETF? Here are some of the best-performing healthcare ETFs: ProShares UltraShort NASDAQ Biotechnology XHE SPDR S&P Health Care Equipment ETF XHS SPDR S&P Health Care Services ETF LABD Direxion Daily S&P Biotech Bear 3X Shares PSCH Invesco S&P SmallCap Health Care ETF What is ETF in healthcare? A healthcare exchange-traded fund (ETF) is an ETF that invests stocks of companies that primarily provide medical services, equipment or drugs, or medical insurance. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed bitcoin ETFs. In this article, we will discuss what are energy ETFs in India. Energy ETFs? An exchange-traded fund (ETF) that offers traders access to the energy industry is known as an energy ETF.  Like other exchange-traded funds, Energy ETFs invest in oil, gas, and alternative energy firms to track a broad sector index, sub-sector, commodity, or another asset.  The energy sector is a large portion of the global economy that affects almost every business. Practically every investor with a well-balanced portfolio has some exposure to energy firms.   The fact that energy comprises a significant representation in broad market averages such as the S&P 500 demonstrates its importance. Energy ETFs, as previously said, are security baskets that allow people to invest in the energy industry without having to pick specific firms.   Crude, gas, and alternative energy ETFs invest in firms participating in the discovery, production, distribution, haulage, and heavy industry of energy and related products, as well as those that are engaged in the discovery, manufacturing, distribution, logistics, and production of energy and associated products.   The MSCI World Energy index, for example, monitors all companies in the energy sector that are part of the MSCI World index. As a result, a global energy ETF allows you to invest in the world's largest energy corporations.  Energy ETF shares, like stocks, can be acquired on a stock exchange. Unlike mutual funds, there is no loading on ETFs, and the fees are often lower. Energy ETFs with a specialized focus encompass various industries, locations, and risk profiles. Both conservative and adventurous investors have options.   The energy sector involves a highly complex and sophisticated network of enterprises producing and transmitting the energy required to power daily life and business.  Global energy supply and demand is a massive element in sector performance, yet demand isn't static. When oil and gas prices are high, producers usually outperform, whereas they earn less when their value falls.   On the other hand, oil refiners can benefit from lower crude prices by lowering the cost of feedstock used to make petroleum products like gasoline.  However, one important thing to note here is that renewable energy producers and providers may not be factored into the energy sector; thus, clean energy ETFs can be used to invest in such businesses. Source: Pexels What are some benefits of investing in energy ETFs in India?  Energy ETFs offer access to various firms to invest in without requiring you to pick them individually. It is a bundle of energy assets helping you to avoid market risk, commodity price risk, and geopolitical risk, which are all risks connected with investing in the energy sector.  One can also select specialized ETFs based on investment objectives and specific requirements. For example, if users wish to invest in new kinds of energy, ETFs allow them to choose between clean energy ETFs and classic energy businesses that deal with petroleum, gasoline, and lignite.  Energy ETFs have $80.18 billion in assets under management, with 55 ETFs trading on US exchanges. The cost-to-income ratio is 0.68 percent on average.  With $35.91 billion in assets, the Energy Select Sector SPDR Fund XLE is the largest Energy ETF. The best-performing Energy ETF in the previous year was NRGU, which returned 156.99 percent.   On January 20, 22, the Direxion Daily Oil Services Bull 2X Shares ONG, the most recent ETF in the Energy industry, was launched.  Let's now look at some top and bottom performers Top ETF Performers according to etf.com  Bottom ETF Performers according to etf.com  ETFs provide diversification, but there are hazards that you need to take into account. Any specialized sector-based ETF, such as one that follows energy companies, might increase portfolio volatility, so doing due diligence before making any investment decisions is imperative.   Investors should read the prospectus, especially when dealing with volatile commodities like energy. It will provide a decent understanding of associated costs and the securities to which the ETF exposes you. FAQs What are Energy ETFs? An exchange-traded fund (ETF) that offers traders access to the energy industry is known as an energy ETF. Like other exchange-traded funds, Energy ETFs invest in oil, gas, and alternative energy firms to track a broad sector index, sub-sector, commodity, or another asset. What are some benefits of investing in energy ETFs in India? Energy ETFs offer access to various firms to invest in without requiring you to pick them individually. It is a bundle of energy assets helping you to avoid market risk, commodity price risk, and geopolitical risk, which are all risks connected with investing in the energy sector.  Is energy ETF a good buy? Energy ETFs invest in oil, gas, and alternative energy firms to track a broad sector index, sub-sector, commodity, or another asset. The energy sector is a large portion of the global economy that affects almost every business. Practically every investor with a well-balanced portfolio has some exposure to energy firms. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed Marijuana ETFs. In this article, we will discuss ESG ETF. An ESG investment is a socially responsible investment that considers a company's impact on the environment, its shareholders, and the planet in addition to financial rewards.   Investors have recently become interested in the financial efficiency of ESG stocks. Many companies with good ESG track records demonstrated lower fluctuation than their non-ESG rivals during the market upheaval caused by the COVID-19 epidemic.   ESG investment was justified for many investors because good corporate behavior leads to more significant financial results.  ESG ETFs?  ESG stands for Environmental, Social, and Governance - the three criteria to adjudge the company's sustainable performance.   E- Environmental addresses the effect of the company's business on the planet through Climate change policies  Greenhouse gas emissions   Carbon footprint   Water use and conservation and waste disposal   Renewable energy sources   Recycling and disposal methods   Green products, technologies, infrastructure, and so on.  S-Social addresses the company's responsibility toward society, its employees, and its customers. Employee dealing and remuneration  Employee Skills and Development  Employee Security and sexual harassment deterrence  Social inclusion  Ethical supply chain sourcing  Mission or higher purpose  Consumer service   Whistleblower protection programmers  Public stance on social justice matters  G - Governance relates to the governance position and standards in the firm.  Executive remuneration and benefits and their link with long-term corporate value  Ethical governance policies.  Social diversity in top-level management.  Presence of conflict of interest in the board.  Shareholders' Influence on the Board  Tenure of board members  Mutually exclusive responsibilities of chairman and CEO  Communication with shareholders is transparent.  Addressing shareholder grievances.  ESG’s performance evaluation can be done with the help of corporate reporting and third-party sources like MSCI ESG Ratings and Sustain Analytics ESG Ratings. Source: Pexels Why choose ESG ETF?  Environmental, social, and governance challenges are essential threats to operations and profits in every industry. Hence firms segregated on such grounds are bound to perform well in the foreseeable future.   Companies trying to address ESG issues will perform well and have fewer disruptions in business routines. They face less scrutiny from regulators and produce reliable financial returns resulting in a lower risk for investors.  ESG-compliant companies also produce superior financial returns. Take, for instance, JUST Capital's JUST U.S. Big Cap Diversified Index (JULCD), which analyses the performance of large, publicly-traded firms with substantial environmental, social, and governance (ESG) scores.   It comprises half of the Russell 1000 index's large-cap public firms. Still, it excludes those without a demonstrable dedication to employee well-being, valuable goods, positive environmental performance, and strong communities. For three years, JUST Capital's JULCD index has outperformed the Russell 1000.  Thus, ESG-compliant investing helps keep portfolio risks at bay and generate competitive returns.  What are some risks of ESG ETF investing?  There are no universally accepted ESG standards, thus leaving a scope of discretion to the ESG scoring agencies. For instance, some ESG funds also hold companies manufacturing tobacco!  As ESG is a comparatively newer concept, no long-run data proving its efficacy is available.  Companies may no longer report sustainability data of their own volition. Any reduction in the availability of high-quality (investable) ESG enterprises results from a general dereliction of ESG qualities.  ESG ETFs have a total asset under management of $159.76 billion, with 50 ETFs trading on U.S. exchanges. The expense ratio is 0.36 percent on average.  With $48.64 billion in assets, the Vanguard Information Technology ETF is the largest ESG ETF. FLCA was the best-performing ESG ETF in the previous year, with a gain of 22.43 percent.   On 11/08/21, the iShares ESG Advanced Investment Grade Corporate Bond ETF ELQD became the most current ETF in the ESG area.  Let us look at some top gainers and losers Top ETF performers according to etf.com  Bottom ETF performers according to etf.com There is no paucity of money or interest going into ESG investment. ESG investments will stay valid and expand further, thanks to drivers of change like E.V.s and the effect of the coronavirus.   That implies it's time for investors to start paying notice. A fantastic strategy to assure portfolio success is to align your money with your values. FAQs What is an ESG investment? An ESG investment is a socially responsible investment that considers a company's impact on the environment, its shareholders, and the planet in addition to financial rewards.   What are some risks of ESG ETF investing? There are no universally accepted ESG standards, thus leaving a scope of discretion to the ESG scoring agencies. For instance, some ESG funds also hold companies manufacturing tobacco!  As ESG is a comparatively newer concept, no long-run data proving its efficacy is available.  Companies may no longer report sustainability data of their own volition. Any reduction in the availability of high-quality (investable) ESG enterprises results from a general dereliction of ESG qualities.  Consult our expert advisor to get the right plan for you TALK TO AN EXPERT

Earlier we read about the three costliest ETFs regarding their expense ratio. In this article, we will know the three cheapest ETFs regarding their expense ratio.  Two of the most successful long-term investment vehicles are mutual funds and exchange-traded funds (ETFs). You may even have some of these in your pension fund.   However, a part of your portfolio is dedicated to a charge termed an expense ratio each year. It's critical to understand the costs you're paying no matter what you're investing in.  And, given the prevalence of mutual funds and exchange-traded funds (ETFs), many of us pay an annual expense ratio out of our portfolios.  What is an Expense Ratio?  The fee that mutual-fund or exchange-traded fund charge investors is the Expense ratio. This charge covers the costs of management, asset allocation, marketing, and other services.   These charges are calculated as a portion of an investor's annual cost. ETF expense rates are often less than 1%. That means you spend less than $1 per year on expenses for every $100 you invest. Three cheapest ETFs in terms of their expense ratio Rank ETF SymbolExpense Ratio1 JP Morgan Betabuilders U.S. Equity ETFBBUS0.02%2 Vanguard Total Stock Market ETFVTI0.03%3 iShares Core S&P 500 ETFIVV0.03% 1. JP Morgan Betabuilders U.S. Equity ETF  BBUS invests in the top 85% of stocks in the US equity market by market capitalization across all sectors. The fund includes large-cap and mid-cap stocks.   Common shares, preferred shares, and REITs are forms of equity securities. BBUS, part of the "BetaBuilders" suite, offers low-cost, plain-vanilla access to US stocks, except for small-cap enterprises, which can be used as a primary investment or complement BBMC or BBIN.   The fund might invest up to 20% in futures to track the index more closely. The index recalibration is done every three months. The MSCI ESG Fund Rating for JPMorgan BetaBuilders U.S. Equity ETF is AA, with 7.61 out of ten Performance  Performance [as of 18/03/22]1 year3 years5 years10 yearsBBUS10.62%17.92%--MSCI USA IMI12.14%17.85%15.10%14.24% The fund invests entirely in the United States.  Top 10 Holdings  Source: etf.com BBUS details  BrandJPMorganExpense Ratio0.02%YTD Return-7.79%AUM$1.05BNumber of Holdings632Avg. Spread ($)$0.04Average Daily $ Volume$8.51M 2. Vanguard Total Stock Market ETF  VTI is a strong option for buyers or investors looking for broad equity exposure across the market, including micro-caps. The fund is impartial, with no gambles on businesses, sizes, or styles.   The fund is handled passively and is always fully invested. The ETF has tracked various broad indexes over the years, including Dow Jones, MSCI, and, as of June 2013, CRSP. Its current index closely resembles the MSCI benchmark.   Like all other Vanguard ETFs, portfolio transparency is reported monthly rather than daily. The MSCI ESG Fund Rating for Vanguard Total Stock Market ETF is AA, with 7.36 out of 10.  Performance  Performance [as of 18/03/22]1 year3 years5 years10 yearsVTI3.94%15.79%13.74%13.58%CRSP U.S. Total Market6.94%16.74%14.33%13.73% The fund invests entirely in the United States.  Top 10 Holdings  Source: etf.com  VTI details  BrandVanguardExpense Ratio0.03%YTD Return-7.81%AUM$285.63BNumber of Holdings4033Avg. Spread ($)$0.03Average Daily $ Volume$1.22B 3. iShares Core S&P 500 ETF  IVV, one of the numerous ETFs that reflect the S&P 500 Index, provides good exposure to large-cap stocks.   Despite popular belief that the S&P 500 index gives pure market-cap access to the US market, the index's committee has the authority to omit individual companies.   IVV also has a smaller skew than our benchmark because it trades at a lower market capitalization. Nonetheless, our research shows that these discrepancies are mainly academic, as the fund provides excellent coverage.   IVV is organized as a 1940 Act Fund, which, in comparison to other structures, makes it more appealing to buy-and-hold investors because dividends are investible.   The fund issues daily positions. The MSCI ESG Fund Rating for the iShares Core S&P 500 ETF is AA, with 7.79/10.  Performance  Performance [as of 18/03/22]1 year3 years5 years10 yearsIVV8.98%16.70%14.35%13.97%S&P 50011.53%17.54%14.91%14.25% The fund invests entirely in the United States.  Top 10 Holdings  Source: etf.com IVV details  BrandiSharesExpense Ratio0.03%YTD Return-7.13%AUM$324.85BNumber of Holdings507Avg. Spread ($)$0.03Average Daily $ Volume$3.99B FAQs What ETF has the lowest fees? JP Morgan Betabuilders US Equity ETF   Vanguard total stock market ETF   iShares Core S&P 500 ETF What is the expense ratio? These charges are calculated as a portion of an investor’s annual cost. ETF expense rates are often less than 1%. That means you spend less than $1 per year on expenses for every $100 you invest.   The fee that mutual-fund or exchange-traded fund charge investors are Expense ratio. This charge covers the costs of management, asset allocation, marketing, and other services.    How much should I invest in my child’s education?   Saving money without a target is challenging. As soon as your child decides what they want to pursue, look out for colleges or universities that offer the course and do your research to find out the tuition fees and accommodation costs to get an idea of the total cost of education and then explore saving plans that can help you accumulate the amount you need for college.   How can I save for my child’s higher education?   It is extremely important for parents to realize that their saving needs to beat inflation for them to afford the future cost of education. They should choose an asset class that provides them with inflation-beating returns. In most cases, mutual funds offer better returns than other investment vehicles, which can help parents save for their child’s education.