This website including the ‘[EduFund]’ platform is owned, operated and maintained by Helena Edtech Private Limited, a company incorporated under the laws of India. The platform and the services thereunder are provided on an "as is" basis. Use of the service and the platform is at your own risk. Company makes no warranty that the use of the service and the platform will be continuous, uninterrupted, bug-free, error-free, virus-free, free of defects, free of technical problems, nor that it will meet all of your needs. To the extent permitted by applicable law, Company expressly disclaims all other warranties, conditions, results, guarantees, or representations with respect to the service and the platform, whether express or implied, including, but not limited to, the implied warranties of merchantability, merchantable or satisfactory quality, fitness for a particular purpose, non-infringement of third party rights, or arising from the course of performance, course of dealing, or usage of trade.
Investment in securities market are subject to market risks, read all the related documents carefully before investing. The valuation of securities may increase or decrease depending on the factors affecting the securities market.
EduFund and the EduFund App are the brand and product of Helena Edtech Private Limited
“An affiliate of the Company, i.e. Samyama Advisors Private Limited, is registered with the Securities and Exchange Board of India (SEBI) as an investment adviser under the SEBI (Investment Advisers) Regulations, 2013 bearing the registration number [INA000015321]. Samyama Advisors Private Limited may provide investment advice to the clients through the Company's platform.”
Registered Address: 30, Omkar House, Near Swastik Char Rasta, Navrangpura, Ahmedabad Gujarat, India – 380009
Transaction Platform Partner : BSE Star MF (with Member code-51573). CIN No: U67100GJ2020PTC112589. RIA Number: INA000015321 GST No: 24AAFCH2122L1ZU
What is the difference between ETF vs FOF? All you need to know
In the previous article, we learned about the difference between debt funds vs hybrid funds. In this article, we will look into the difference between ETF v/s FOF
ETF (Exchange-traded funds)
An ETF (Exchange-traded fund) is a collection or portfolio of stocks. It aims to track market indices and thus imitate at least the same returns.
They are the choice of those people who wish to trade in open-ended funds. Like stocks, ETFs are also listed and traded on the stock exchanges.
Since trading happens on the stock exchanges, the value of the ETFs depends upon the demand and supply the price fluctuates during the trading hours and can be less or more than the NAV (Net Asset value).
ETFs are of various types, like Bond ETFs, Industry-specific ETFs, Commodity ETFs, Currency ETFs, etc. The taxability of ETFs is dependent upon the holding period LTCG (Long term capital gains tax) is applicable if the holding period exceeds one year. Gains up to Rs 1,00,000 are not taxed and for gains above Rs 1,00,000, LTCG is suitable at 10% without indexation benefits. For a holding period of fewer than 12 months, STCG (Short term capital gains tax) of 15% is applicable.
For Gold ETFs, STCG is applicable if the ETF’s holding period is less than 36 months; and LTCG post that period. The applicable STCG is in accordance with your income-tax slab, and the LTCG is 20% with indexation benefits.
FOF (Fund of Fund)
A Fund of Fund (FOF) is a fund that invests in various mutual fund schemes from either the same or different fund houses. FOFs are personalisable to cater to the investment goals and appetite of the investors.
In other words, FOFs are open-ended mutual funds that contain different types of mutual funds. Unlike ETFs, FOFs are not tradeable on the stock exchanges. FOFs’ trading happens once per day; hence they are less liquid than ETFs; the price of FOFs is calculated at the end of the trading day.
The different types of FOFs are international FOFs, gold funds and asset allocation funds. For Funds of Funds, STCG is applicable if the ETF’s holding period is less than 36 months; and LTCG is suitable for a holding period exceeding 36 months.
The applicable STCG is per your income-tax slab, and the LTCG is 20% with indexation benefits.
On cost terms, ETFs are cheaper than mutual funds as they are passively managed; thus, their expense ratio is usually less than 0.5%. On the other hand, FOFs are a bit costly in that they are actively managed funds, and thus the management costs are added to the usual fee.
Consult an expert advisor to get the right plan for you