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As more and more individuals move out, earning a degree from an international university may sound fancy and appear aspirational, but there are expenses associated with it, and handling them is not always easy. Although obtaining student loans is now quite simple, statistics suggest that few people appear to be aware of this. Although more students are traveling to study abroad, there are also more defaulted student loans. The Indian Banks' Association said that as of March 2018, there were around 9% more education loan defaults than there were in March 2016 (7.3%).   Data from the Mumbai-based credit agency CRIF High Mark reveals a rise in the average amount of new loans disbursed annually. The average ticket size for new student loans as of September 2018 was $8,95,000 compared to $7,08,000 at the end of FY18. "Indian demographics favor youth and high academic achievement, which boosts employability. Due to rising educational costs, the majority of students need loans.   The number of students who can obtain employment based on non-immigrant visas for temporary workers is capped under the new H1B visa laws in the US, which is one of the factors contributing to the shrinking of the ability to repay loans. Each fiscal year, there is a cap of up to 65,000 visas, with an additional 20,000 visas reserved for those who have obtained their master's degree from a US university. However, a much bigger number of people apply for the H1B visa. 236,000 applications were received by US Citizenship and Immigration Services (USCIS) in FY17.   Thus, the student's employability has greater significance. The student and the guarantor can experience more financial strain if that market slows down. How to avoid the negative long-term consequences of education loans?  1. Avoid Purchasing a Home  One's capacity to buy a home is severely impacted by student loan debt. In a 2015 survey by Equifax, 55.7% of millennial renters cited "school loan debt/not enough money saved" as their main deterrent to home ownership. Even if you have the ability to make the required monthly payments, paying down student debts may prohibit you from setting aside enough money for the minimum down payment needed by many lenders.  2. Live and work at Home  While some renters cannot afford to buy a home, other millennials with student loan debt, particularly those who reside in large cities like New York, Chicago, or Boston, cannot even afford to rent apartments.   According to Apartment Guide, the national average rent for a one-bedroom apartment in the US will rise from $1,596 in 2019 to $1,621 in 2020. When you have a student loan debt of approximately $30,000, that might be pretty difficult to pay. Many of these young adults choose to stay in the nest since their income is insufficient to cover their rent and school debt repayment.  3. Bringing Down Your Net Worth  Significant student loan debt can undoubtedly lower your overall net worth. There are differences between college graduates with and without student loan debt, according to a 2014 Pew Research Center analysis. A household led by a college graduate under the age of 40 who has student loan debt had a median net worth of $8,700. On the other hand, the median net worth of a household with a college graduate under 40 and no student loan debt is seven times higher, coming in at $64,700.  https://www.youtube.com/watch?v=4gTQkdePOWM 4. Postpone your dreams  Your standard of life and financial independence aren't the only things that are impacted by student loan debt. It also decides which of your dreams you can pursue and which ones will only serve as a faint recollection. You can find yourself forgoing a career with better compensation for one that provides you with a greater sense of fulfillment and purpose.   For instance, you might aspire to work for a charitable organization. But if you find out that the money that comes with it could not be enough to cover your financial commitments, you might have to give that up. In reality, you'll have to give up on these goals in favor of a higher-paying position so you can make your student loan payments.  5. Student loan debt persists Debt from student loans is distinct from other forms of debt. For instance, if a customer can't afford auto payments, they can return the vehicle to the dealer, and if a homeowner can't make their mortgage payments, they can return the keys to the bank. Your student loans are not subject to that rule. Nothing is left to return when you complete the student loan repayment process. Whether you used the money for education or not, it has already been spent.  Conclusion  More students are taking out education loans to pay for their education. It's crucial to understand the repercussions of borrowing money and to be self-disciplined enough to borrow what is necessary before even considering taking out a loan. Make cautious arrangements to repay your loans when you borrow, making sure to account for the earnings you can anticipate after graduation in the sectors that interest you.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

For students looking to study abroad, the UK is the ideal location. India ranks as the second-highest nation of origin for students at UK higher education institutions. If you are an aspiring student planning to study in the UK but are concerned about the expense of attending a UK university, this blog will help you understand how an education loan may help you. An education loan for a course in the UK is one of the most popular options among the different forms of financial help offered to overseas students.  How does one apply for a student loan in the UK?  You can now get a study loan for the UK with low-interest rates, flexible payment schedules, a simple application process, few documentation needs, and quick approval. To learn about interest rates, repayment options, and loan amounts and to create a budget for the expense of studying in the UK, all you need to do is contact the loan providers.  Explore this page to learn more about the cost of studying in the UK, the prerequisites for student loans in the UK, the costs that are covered by the loans, repayment, loans for Indian students studying in the UK, etc.  https://www.youtube.com/watch?v=4gTQkdePOWM Why would you need a UK student loan?  If you have decided to study abroad in the UK, you should be aware that it is one of the most expensive countries. The entire price includes university tuition fees, cost of living factors like lodging, food, transportation, health care charges, and other expenses. One could feel financially constricted with so many expenses.  The following are some of the main justifications for choosing student loans in the UK:  Interest rates on any loan, including home loans, auto loans, personal loans, and others, are frequently higher than those on student loans. Additionally, female borrowers receive a 0.5% discount from all Government banks.  A student loan in the UK will pay for your tuition, transportation (tickets), housing rent, university fees, food expenses, living expenses, laptop, and any other item necessary for your studies.  Usually, parents sell off sizable amounts of assets to pay for their children's education in the UK, which throws off their long-term financial goals. When you take out an education loan, however, banks hold your liquid assets, such FDs, insurance, and government bonds, as collateral and issue you a loan based on that security.  A student loan for the UK is one of the effective options to pay for all of your expenses promptly and safely while still meeting visa and admission standards.  But how can I apply for an international student loan in the UK? Let's look at the eligibility and prerequisites for UK student loan applications.  Criteria and conditions for obtaining a Student Loan in the UK  Let's look at the qualifications for loans for Indian students studying in the UK before delving into the procedure of obtaining one:  The candidate must be an Indian citizen.  The applicant's age at the time of loan application should fall between 18 and 35.  They must have received official word of admission to a reputable UK institution.  There must be a co-applicant, who may be a parent or spouse.  Co-applicants must have a reliable source of income.  What paperwork is necessary to obtain a student loan?  If you wish to apply for a study loan in the UK, the following documentation is required to support your loan application:  Bank loan application form for education.  Proof of enrollment.  An Aadhar card, voter ID, passport, or driver's license, serves as identification.  Examples of address documentation include bank statements, rental agreements, ration cards, utility bills, and phone bills.  Age verification documents include an Aadhar card, voter ID, driver's license, and passport.  Passport-size photos.  When requesting a loan, proof of income in the form of pay stubs is required.  Financial records  Recent exam results, such as higher secondary exams or graduation results, are on mark sheets.  A copy of any award letter.  A thorough breakdown of the costs involved in taking your selected course.  Statement of the borrower's bank account.   The assets and liabilities of the co-borrower are listed.  APPLY FOR EDUCATION LOAN How can Indian students get a Loan in the UK?  The answer is a resounding yes if you're asking whether or not loans for Indian students are available in the UK. You can borrow money to pay for tuition and living expenses at UK institutions. The university, course, age, nationality, and whether you've taken higher education courses all affect your eligibility for student financial aid. Here are the procedures to follow when requesting a student loan in the UK:  For a student loan in the UK, you can apply online.  You can apply for financial aid through an education loan to study in the UK for up to nine months after the start of your academic degree.  Processing of your application could take up to six weeks.  You must provide identification evidence.  Once you start making a consistent paycheck, you can pay off these loans.  Your monthly income will also affect how many and how many installments you will receive each month.  Types of student loans for the UK  Let's look at the two major forms of loans available to Indian students in the UK:  Collateral Education Loan: A secured education loan in the UK or a loan for which you must offer security or collateral in order to be approved. Real estate or fixed assets like FDs are examples of securities that can be either material or immaterial.  Non-Collateral Education Loan: You do not need to present any collateral in order to apply for an unsecured education loan in the UK.  Additionally, the table below details the main distinctions between these two loans: Secured Loan Unsecured Loan The bank requires collateral security to provide such a loan. There is no need for collateral to avail of this type of UK education loan for international students. Helps you get a loan of up to 1.5 crores Helps you get a loan of up to 750,000 INR for the UK The rate of interest is usually lower The rate of interest is usually higher  What Indian banks offer student loans to UK citizens?  Bank Name Maximum Amount of Loan (in INR) Interest Rate State Bank of India 1,50,00,000 10.50% Bank of India 40,00,000 8.95-9.75% Bank of Baroda 1,50,00,000 8.50-9.15% Central Bank of India 20,00,000 8.65-10.60% Allahabad Bank 50,00,000 7.15-10.05% Punjab National Bank Determined on the basis of need 8.90% HDFC Bank 30,00,000 14% ICICI 1,00,00,000 10.50-13% Axis Bank 75,00,000 INR 13.70-15.20%  What costs in the UK Are Covered by Student Loans?  Look at the costs paid by student loans in the UK:  Payments due to the institution  Fees for exams, library memberships, and lab services  Expenses for the books and supplies required to finish the course  Refundable reservation deposits, cautionary deposits, etc.  The cost of travel to study abroad  Up to 50,000 INR was spent on a two-wheeler.  Costs associated with a research trip or a project for the class  It is expensive to pursue a degree in one of the top study-abroad countries, such as the UK. Instead of delaying your decision to study in the UK, it is wise to take out an education loan for the UK. Hope you learned about the prerequisites, eligibility, and application process for student loans in the UK from the aforementioned guide. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Planning to apply abroad and stressed about your education loan application? Keep reading to find out the difference between private vs government-backed education loans for abroad.   Education loans offered by private vs government backed banks differ in interest rates, moratorium periods, processing costs, and payout, are different.  Government banks are those where the government itself holds the majority of the bank's stock, as opposed to private banks, where the majority of shares are held by shareholders. State Bank of India, Bank of Baroda, Bank of India, and the Central Bank of India is the government banks whereas ICICI Bank, Axis Bank, and HDFC Bank fall in the category of private banks. https://www.youtube.com/watch?v=4gTQkdePOWM Government banks vs private banks  Quantum of Finance: Secured education loans and unsecured education loans are the two main divisions of overseas student loans. Government banks like SBI and BOB can provide up to 1.5 Crore in financing for secured education loans, but private banks like Axis Bank and ICICI Bank can provide financing ranging from 75 lakhs to 1 Cr. The amount of funding for unsecured overseas education loans is up to 7.5 lakhs for government banks and up to 40 lakhs for private banks.  Rate of Interest: Both public and private banks have different rates of interest. Private banks have a higher return on investment than government banks. The interest rates offered by the State Bank of India and Bank of Baroda for loans for international education are 8.5% to 9.5%. For secured education loans from private banks like Axis Bank and ICICI Bank, the interest rate ranges from 9% to 10%, and for unsecured education loans from 11% to 13%.  Processing Time: Government banks process loans for international education in up to three weeks, whilst private banks process loans in up to ten days. This is one of the reasons we suggest applicants apply for international student loans at least three months before the program's start date.  Processing Fees: Compared to government banks like SBI, BOB, BOI, etc., the processing fees levied by private banks like ICICI Bank and Axis Bank are greater. To be precise, processing fees charged by government banks are 10,000 + GST, whereas fees charged by commercial banks might reach 1% of the total amount of the student loan.  Disbursement: The sum of the education loan is disbursed to the appropriate university's bank account by both public and private banks. These banks send the money into the currency card that is issued by the same institution that provided the loan in order to pay for living expenses.  Repayment Tenure: This refers to the length of time that the applicant has to pay back the financial institution for the student loan in Equated Monthly Instalments (EMIs). After the moratorium period is up, the education loan EMIs start. Government and private banks both provide up to 15 years for repayment.  Moratorium period: The moratorium period is the portion of the loan term during which the applicant for an international education loan is exempt from making any loan payments to the financial institution. In other words, lending institutions provide students with a waiting time of between 6 and 12 months. For government banks, the moratorium term is up to 12 months, whereas it is up to 6 months for private banks.  Serving Simple Interest: After an overseas education loan has been disbursed, serving Simple Interest for government banks is optional, however serving Simple Interest for private banks is required.  Age Restrictions: Applicants between the ages of 18 and 35 are eligible for loans from both public and private banks for international education. To qualify for an education loan from these banks, applicants over 35 must have a solid academic and financial background.  Tax Benefits: Under section 80E, financial institutions of both the private and public sectors are qualified to receive tax benefits.  Conclusion These are some of the key factors that should be taken into account when selecting an appropriate financial institution for an education loan for studying abroad. Both public and private banks have advantages and disadvantages.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

Students need to know about the cost of studying in IIM beforehand to take appropriate steps to arrange the college fees. As education inflation has reached its peak, the cost of educational expenses is also on the higher side. A brief introduction to IIM The Indian Institutes of Management, commonly referred to as IIM, is a public business school owned by the central government of India. The IIMs offer several study courses like MBA Executive, doctoral, postgraduate, and undergraduate, as well as business administration-related additional courses.  The flagship program of IIM is the MBA or Master of Business Administration program, which is offered as a one-year global MBA program or a two-year Postgraduate Program in Management (PGP).  Average Cost of Studying in IIMs There are several IIMs in India, the prominent three being IIM Ahmedabad, IIM Bangalore, and IIM Calcutta also referred to as IIM-A, IIM-B, and IIM-C, respectively. The MBA fee structure of all the IIMs varies between INR 16 Lakh and INR 27 Lakh.  The IIM MBA fees for the top three institutes are the highest and range between INR 24 Lakhs and INR 27 Lakhs, and for newly opened institutes, the fee varies between INR 16 lakhs to INR 19 Lakhs.  There is a distinct difference between the fee structure of older and newly built IIMs because the new IIMs are financially backed by the government, unlike the older ones, which bear the maintenance and other expenses by themselves. Components of MBA Fees: IIM Fee Structure The IIM fee structure includes Tuition fees Traveling expenses Boarding fees Personal expenses Library fees Cost of eating in the Mess  Internet expenses Cost of books and course materials Computer/laptop cost Study tours Alum activity Miscellaneous expenses Students can pay the total fees at one go or opt for a semester-wise payment schedule, whichever they find comfortable. Cost of studying in Top 10 IIMs IIM CampusTotal Tuition FeesIIM AhmedabadINR 24.61 lakhIIM BangaloreINR 24.50 lakhIIM CalcuttaINR 25.00 lakhIIM LucknowINR 20.70 lakhIIM KozhikodeINR 20.50 lakhIIM RaipurINR 16.10 lakh (excluding boarding fees)IIM UdaipurINR 19.00 lakhIIM RohtakINR 17.60 lakhVisakhapatnamINR 17.58 lakhIIM TrichyINR 19.5 lakh An overview of the top 3 IIMs  1. IIM Ahmedabad  IIM Ahmedabad is the country's most popular and most expensive IIM, offering Business & Management Studies. The institute offers several facilities like a hostel, library, cafeteria, labs, gym, music room, wi-fi campus, auditorium, medical facilities, sports complex, and a/c classroom.  The total tuition fee structure for the different courses is. CourseTotal Tuition FeesDurationMBA/PGDM (3 courses – 50 seats)INR 12 lakh - INR 24.61 lakhFor 16 months – 2 yearsExecutive MBA/PGDM (1 course – 140 seats)INR 31.5 Lakh 1 yearMMS (1 course)INR 20 lakh2 yearsCertificate (2 courses – 60 seats)INR 1.57 lakh4 – 6 months 2. IIM Bangalore Established in 1973 with NIRF ranking two and a 100-acre campus area, the IIM fee structure covers fees for personal accident insurance and medical insurance besides the regular fees structure offered by almost all the IIMs. Statistics of Bangalore placement 2022 show that 137 companies visited the campus and made 662 offers. The median and average package offered was INR 31.20 lakh per annum and INR 33.82 lakh per annum, respectively. CourseTotal Tuition FeesDurationMBA/PGDM (4 courses – 635 seats)INR 12.5 - INR 24.5 lakh1 year – 2 yearsCertificate (79 courses)INR 65 k – INR 17.75 lakh2 days – 15 monthsExecutive MBA/PGDM (1 course – 75 seats)INR 23 lakh1-year 3. IIM Calcutta IIM Calcutta ranked 3rd under the NIRF rankings and was the first to be established under IIM legacy. According to the available statistics for 2022, the placement percentage of the institute last year was 100%, as 190+ companies visited the campus, and 631 offers were made to the students.  CourseTotal Tuition FeesDurationMBA/PGDM (3 courses)INR 23.2 lakh – INR 25 lakh2 yearsExecutive MBA/PGDM (2 courses)INR 13.5 lakh to 31 lakh1 yearCertificate (35 courses)INR 2.5 lakh – 12.89 lakh6 months – 1 year Conclusion Parents aware of the cost of studying in IIMs from the beginning can create an education corpus for their child or prepare themselves mentally to take an education loan if required. Although IIMs offer loan assistance and scholarships, it is better to be aware of the fees and decide beforehand whether it fits your budget. Education counselors at the Edufund App can help you to create a feasible education plan that will prove helpful in knowing about your options. The app also has education loan facilities for students who want to pursue a degree on loan.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

Barclays made a substantial strategic attempt to build the ETF industry in 2000, launching over 40 new products under the iShares brand, backed by intensive education and marketing.   BlackRock bought the iShares brand and company from Barclays in 2009 and now manages a group of exchange-traded funds (ETFs). The listing of iShares funds London Stock Exchange New York Stock Exchange Hong Kong Stock Exchange iShares provides portfolio building blocks for small and large investors through the medium of ETFs. iShares offers more than 900 different investment products and has an AUM of over $ 3 trillion.  iShares provides a varied range of investment products based on strategies, assets, themes, goals, etc. iShares has several ETFs and Mutual funds.   However, ETFs dominate the space. As of February 2022, iShares ETFs dominated the Market capitalization of the most significant exchange-traded funds (ETFs) worldwide. Blackrock iShares offers various investment products in ETF and mutual fund parlance. They include underlying assets of bonds, stocks, real estate, commodities, etc., in developed and emerging economies.   One of the unique traits of iShares is that it is a leading player in offering sustainable ETFs. iShares has been providing ESG-based ETFs for its investors. ESG funds are funds that have underlying securities of firms and countries which have passed rigorous  Requirements of being ESG compliant. Only assets with a high sustainability score are included; this would rule out sovereign bonds with unsound ESG track records.   An ESG in security selection leads to better-informed investment decisions, and sustainability funds may outperform non-sustainable funds due to superior risk management.   Companies having a lesser carbon footprint incur less regulatory scrutiny than others, thus making their stock stable over time.   Sustainable funds include ETFs classified as Screened ETFs mimic specific indices that eliminate the risk of exposure to certain areas of business. iShares ESG Screened S&P 500 ETF is an example of a screened ETF.   A broad ESG ETF is a group of ETFs that track ESG-compliant sectors, businesses, and indices. It has several subcategories.  Broad ESG ETFs screen sectors and indices based on their ESG compliance- having several subtypes, namely. Thematic ESG ETFs focus on one of the ESG themes of Environment, Social, or Governance. One such fund classification in thematic ESG is Carbon transition readiness.   These funds focus on companies and sectors that Blackrock feels are ready to work in a low carbon footprint economy. Impact funds generate sustainable outcomes alongside a financial return.  iShares also provides investors with a technologically superior core portfolio builder, which helps investors build their long-term wealth growth portfolio.   It also provides investors with ETFs based on various goals of wealth creation, income earning, active factor-based wealth creation, etc.  Income ETFs provide investors with two choices of ETFs One for yield Fixed income. Yield ETFs include ETFs in the likes of Equity Income ETFs, High Yield Bond ETFs, International Bond ETFs, Tax-Free Muni ETFs, Hybrid Security ETFs, Real Estate ETFs, and multi–Asset ETFs.   Fixed-income ETFs include ETFs like Core Bond ETFs, Investment Grade ETFs, Short Duration Bond ETFs, Tax-Free Muni ETFs, International Bond ETFs, Inflation-Protected ETFs, Interest Rate-Hedged ETFs, etc.  Along with ETFs, iShares also has a comprehensive collection of mutual funds which invest in asset classes like equities, bonds, real estate, etc. iShares mutual funds started as early as 1993, with the iShares S&P 500 index fund.   Some iShares Mutual Funds are Russell 1000 Large-Cap Index Fund iShares Developed Real Estate, Index Fund Short-Term TIPS Bond Index Fund iShares U.S. Aggregate Bond Index Fund, etc.   The bottom line is that whilst building a portfolio, neglecting iShares should not be the case.  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. Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world.    Does BlackRock run iShares? Blackrock is responsible for iShares ETFs and it is the largest asset manager in the world. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Investors can invest in exchange-traded funds to acquire access to an index, a commodity, a bond, or a basket of assets, similar to an index fund. When investing in ETFs, an investor can choose from various order types. i.e: market order or limit order, each having significant differences affecting the price.  When it comes to trading ETFs, should investors prioritize price or speed? Although there is no definite answer to this topic, distinguishing between market and limit orders might help you make more intelligent selections. We'll go over the differences among order types and why an individual might prefer one over the other. Market orders: A type of order that ensures execution  A market order is an order to purchase or sell an ETF at the next best price available. If there is contra-side liquidity, a market order is almost always executed, but not at a price.  It's not the same as a limited order, which specifies the maximum price you're willing to buy or the lowest price you're ready to sell. If there are no contra-side orders at the price, a limit order is guaranteed at a price but not execution.  If you place a market order, you take the chance that the prices are accessible when the venue receives your order and are the same as the ones you had seen when you sent the order in the first place.   For example, if you sent a market buy order, the ETF's prices remain the same or fall while your order was in transit.  Even if the following available prices are worse for you than the previous ones, you will still receive your assured execution. A notable difference between a market order and a market-on-close order, which intends to participate in the official exchange auction and then execute at the closing price.  Even though shares can always be redeemed with the issuer at the end of the day to tidy up the market maker's holdings. An ETF market maker should theoretically be interested in buying and selling an unlimited amount of ETF shares at their fair value price.   However, this does not imply that an ETF market maker will place an unlimited number of ETF shares on the bid or offer price throughout the day, every day, or when an investor's market order hits the exchange's order book. For an ETF market maker, the expenses of attempting to adopt such a strategy far exceed the benefits.  Market makers for ETFs must consider the number of ETF shares they are quoting throughout the industry's ETFs. They distribute their bids and offers throughout most US equities exchanges and off-exchange venues during the trading day to gather as much customer order flow as possible.   However, there's only so much liquidity available at any particular time during the trading day. While an ETF market maker may be ready to price an entire order at fair value and buy or sell the ETF shares that an investor wishes to trade, finding and interacting with such liquidity takes time. A market order won't always do that since it changes as soon as it enters the market.  Limit orders: A type of order that has a safety feature  A limited order will eventually arrive at a fair value price, but it will take some time while waiting for a contra-side order. A limit price specifies the highest price at which you are interested in buying an ETF or the lowest price at which you want to sell an ETF to the market maker.   An investor can fix that value higher (or under) the best available offer (or Bid) to allow short-term price changes while still protecting against significant fluctuations. Why is it important to select the correct order types?  When choosing the proper order type, the investor must examine what risks they are ready to tolerate in their execution plan. This entails selecting more important: transaction execution speed or trade price protection.   Limit and marketable limit orders can help you take advantage of the time it takes for an ETF market maker to replenish their liquidity supply to execute the trade properly. FAQs What is a market order? A market order is an order to purchase or sell an ETF at the next best price available. If there is contra-side liquidity, a market order is almost always executed, but not at a price. For example, if you sent a market buy order, the ETF's prices remain the same or fall while your order was in transit.  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 good for beginners? ETFs are generally suitable for beginners as they are inexpensive compared to a few other investment tools. ETFs have a diversified asset profile, reducing the risk associated with the investment significantly.    Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT

The high volume of trading of an ETF can help us judge the three most traded ETFs in 2022. Let's understand ADTV or Average Daily Trading Volume for an ETF.  What is ADTV or Average Daily Trading Volume?  Investors refer to the number of shares of a specific stock that change hands on average during a single trading day as Average Daily Trading Volume (ADTV). The average daily trading volume (ADTV) can be determined for five days, ten days, etc. The average trading volume for 20 or 30 days is a regularly used ADTV metric.  ADTV of a single stock, options on a stock, or market indexes like the Nasdaq 100 are all tracked.  The average daily value indicator is an alternative to the average daily trading volume indicator. The average daily value calculates the average dollar amount traded d  William O'Neil's 'How to Make Money in Stocks' popularized the use of average volume as one of several data sources for investing decisions.  O'Neil emphasized the importance of paying attention to ADTV for two reasons Ensure that a stock is liquid enough to trade fast. To ensure that stock traders' present supply and demand are on your side.  When a stock's price declines, its daily volume should be lower than the usual daily volume, indicating that selling pressure is easing. When a stock's price has been consolidated and isn't growing much, you would like to see increasing volume as the prices begin to rise, indicating more buyers are entering the market. When a stock's price increases, you want the increased volume to indicate that it will continue to rise. Three most traded ETFs based on three months of ADTV SymbolETFAvg Daily Share Volume (3mo)AUM in $ 1000sTQQQProShares UltraPro QQQ116,601,047$15,408,300.00SPYSPDR S&P 500 ETF Trust112,241,844$385,693,000.00UVXYProShares Ultra VIX Short-Term Futures ETF82,200,375$893,935.00 1. ProShares UltraPro QQQ Overview TQQQ is a leveraged fund that provides 3x exposure to NASDAQ 100 stocks over a one-day holding period. The underlying index contains 100 of the top non-financial listed companies on NASDAQ based on market capitalization.   Technology businesses have historically dominated TQQQ's underlying index; therefore, its future outcomes may be having a strong connection to the tech industry.   The fund uses a quantitative approach to determine the type, number, and combination of investment positions that it expects to deliver daily returns commensurate with its investment objective.   The fund is a very short-term tactical vehicle and, like many levered products, is not a buy-and-hold ETF. The expense ratio of the ETF is 0.95%. Performance Performance [as of 03/02/22]1 year3 years5 years10 yearsTQQQ13.55%59.06%49.35%47.24%Nasdaq 100 Index9.84%26.86%22.73%19.72% 2. SPDR S&P 500 ETF Trust  Overview  SPY is the most well-known and oldest US-listed ETF, and it consistently ranks first in terms of AUM and trading volume. The fund tracks the S&P 500, a widely followed US index.   Few investors are aware that the S&P index committee selects 500 equities to reflect the US large-cap space, not usually the 500 most significant by market capitalization, resulting in occasional single-name absences.  Nonetheless, the index provides excellent coverage to the US large-cap market. It's worth noting that SPY is a unit trust, an older but still functional structure. SPY, as a UIT, must completely replicate its index (which it almost certainly would) and forego the negligible risk and return of securities lending.   It also can't reinvest portfolio income between distributions, resulting in a cash drain that hurts performance in rising markets but helps performance in down markets. SPY is a popular vanilla trading instrument. The ETF's expense ratio is 0.09 percent.  Performance Performance [as of 03/02/22]1 year3 years5 years10 yearsSPY14.81%17.98%14.97%14.49%S&P 500 Index14.94%18.06%15.06%14.61% 3. ProShares Ultra VIX Short-Term Futures ETF  Overview  UVXY is a commodities pool wrapper that provides daily leveraged exposure to short-term VIX futures, which are designed to capture the volatility of the S&P 500.   UVXY is a short-term trading instrument, not a long-term investment vehicle because it is a geared instrument with daily resets.   Returns for a holding period of more than one day, and frequently do, differ significantly from 1.5x. UVXY, like its others, offers scaled returns on the front and 2nd-month futures contracts rather than the VIX index itself.  Investors will receive a K-1 at tax time if they participate in a commodity pool, but they will eliminate the counterparty risk of an exchange-traded note. The fund provided 2x leveraged exposure before February 28, 2018. The expense ratio of the fund is 0.95%.  Performance  Performance [as of 03/02/22]1 year3 years5 years10 yearsUVXY-97.86%-83.44%-78.78%-85.05%S&P 500 VIX Short-term futures Index-58.07%-40.15%-- FAQs What is ADTV? Investors refer to the number of shares of a specific stock that change hands on average during a single trading day as Average Daily Trading Volume (ADTV). What is a high ADTV? An ADTV is high when more investors are interested in a stock and there is a high demand for it while a low ADTV means the stock is not in demand. What is the average daily volume indicator? Average Daily Trading Volume is an indicator that refers to the number of shares of a stock brought and sold on a trading day. What are the 3 most traded ETFs based on three months of ADTV? The 3 most traded ETFs are: ProShares UltraPro SPY SPDR S&P 500 ETF Trust UVXY ProShares Ultra VIX Short-Term Futures ETF Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Louis Mayberg and Michael Sapir, both former Rydex workers, created ProFunds Group in 1997 with $100,000. It also introduced bear market inverse mutual funds that year.  ProFunds Group introduced ProShares, its first inverse exchange-traded fund, in 2006. The business created an exchange-traded fund that invests in Bitcoin futures contracts in October 2021.  ProShares created several ETF product strategies which are available to investors.  With more than $60 billion in assets, ProShares currently has one of the most extensive ETF line-ups. Dividend growth, interest rate hedged bonds, and geared (leveraged and inverse) ETF investing are all areas where the company excels.   ProShares continues to develop new solutions that give investors strategic and tactical options for increasing returns and managing risk.  The company also offers several Proshares ETFs Equity ETFs Non-equity ETFs.   What are Equity ETFs and Non-equity ETFs? Equity ETFs consist of dividend growers, thematic, rising rates, ex-sector, and factors. Non-equity ETFs have bitcoin-linked, interest rate hedged, alternative, and volatility.  ProShares is one of the few firms to provide geared ETFs, i.e., leveraged and inverse ETFs.   ETFs are of two categories: equity and non-equity   Equity ETFs are of types such as broad market, sector, international and thematic investing.   Non-equity ETFs are ones like fixed income, commodity, and currency ETFs. Proshares ETFs strategies are of seven types   Explore Dividend Growth   Thematic Opportunities  Eliminate an S&P 500 Sector  Gain Exposure to Bitcoin Returns  Hedge Against Rising Rates  Leveraged & Inverse Strategies  Opportunities in Market Volatility.  Let’s elaborate on them one by one.  1. Explore dividend growth strategy Aims to capture dividend-rich stocks as underlying assets. The hallmarks of the quality of a firm are evaluated by stable earnings, fundamentals, and a strong history of profit and growth.  The indicators of consistent dividend growth are company health, strong management and durability, and staying power. The ETF follows several dividend-aristocrats indices like the S&P 500® Dividend Aristocrats Index, Russell 2000 dividend growers ETF, MSCI EAFE, MSCI EM, etc.  2. ProShares Thematic ETFs Give investors access to firms at the forefront of trends that reshape our economy and reinvent our future. These include online retail, pet care, transformational changes, big data, nanotechnology, innovative materials, etc.  The Proshares ex-sector ETFs allow investors to eliminate specific sectors that the firm thinks will underperform from the underlying index; the S&P 500 ex-energy ETFs exclude oil, gas, and fuel sectors from the S&P 500. S&P 500 Ex-Financials ETF excludes banks, diversified financials, consumer finance, asset management, investment banking and brokerage companies, insurance companies, and REITs.   3. S&P 500 Ex-Health Care ETF Excludes pharmaceuticals, biotechnology and life sciences tools and services companies, health care providers, equipment and services companies.   4. S&P 500 Ex-Technology ETF Excludes information technology companies, including software and technology hardware and equipment, and semiconductor companies.  5. ProShares Bitcoin Strategy ETF (BITO) It is a novel U.S.-designed ETF to provide investors with an easy way to add bitcoin exposure to portfolios.   The ETF provides investors with a one-stop solution by eliminating the need to maintain separate accounts and wallets to manage bitcoin investments. It is regulated, unlike crypto, and is available all day to trade.  6. ProShares Investment Grade Interest Rate Hedged (IGHG) and ProShares High Yield—Interest Rate Hedged (HYHG) are corporate bond ETFs with an interest rate hedge built-in that aims for a duration of zero, effectively eliminating interest rate risk.  Since 2006, ProShares’ line-up of ETFs has helped investors use leverage to increase their buying power and inverse strategies to profit during or protect a portfolio from declines.   7. Leveraged ETFs Increase exposure to enhance profits and inversely do the same in the opposite direction, thus, providing a hedge against a company or a sector.   8. UltraPro QQQ leverage is some leveraged ETFs  Short QQQ,   Ultra-short QQQ  Triple inverse leveraged ETFs.   Volatility ETFs are for experienced investors who want to profit from losses in the predicted volatility of the S&P500, as defined by the pricing of VIX futures contracts, while also lowering their risk in their U.S. stock portfolio.   Some volatility ETFs are VIX Short Term Futures ETF, VIX Mid-term futures ETF, VIX Ultra short futures ETF and Short VIX short-term futures ETF.  FAQs What are Proshares ETFs? Louis Mayberg and Michael Sapir, both former Rydex workers, created ProFunds Group in 1997 with $100,000. It also introduced bear market inverse mutual funds that year.  ProFunds Group introduced ProShares, its first inverse exchange-traded fund, in 2006. The business created an exchange-traded fund that invests in Bitcoin futures contracts in October 2021. What are Equity ETFs and Non-equity ETFs? Equity ETFs consist of dividend growers, thematic, rising rates, ex-sector, and factors. Non-equity ETFs have bitcoin-linked, interest rate hedged, alternative, and volatility.  ProShares is one of the few firms to provide geared ETFs, i.e., leveraged and inverse ETFs. Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world. Thus, ProShares is a market leader in providing various types of ETFs.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

While analyzing investments, investors use a variety of financial measures. Before purchasing a security, it is vital to have a good understanding of the potential of an investment.   The beta parameter, used in fundamental analysis, is one of the most extensively used metrics.  Amongst the essential financial measurements, you've probably never heard of is beta. This article will explain beta in ETFs and how it affects your exchange-traded funds.  First and foremost, it is important to learn more about beta and how it affects stocks and ETFs.  The statistical metric beta is often used to analyze investments. It examines a stock's sensitivity to the larger market, which is commonly quantified by an index such as the Nasdaq 100, S&P 500, etc. The Direxion Nasdaq 100 Equal Weighted Index (QQQE) is one ETF that tracks the Nasdaq 100 Index.  Beta measures just 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.   A stock with beta 1.0 swings in lockstep with the general market, that is, a 1% increase or decrease in the underlying index, in our case, the Nasdaq 100, is mirrored by a 1% gain or fall in the company's price.  Let us look at it with the help of a simple hypothetical illustration Source: EduFund Research Team As you can see, QQQE tracks the Nasdaq 100 perfectly, leaving the tracking error behind. The ETF perfectly mirrors the changes in the Nasdaq 100. However, this is not the case always. In our example, the beta is 1.  The lower the beta, the less susceptible the underlying instrument is to the market. The QQQE has a beta of 1.04, according to ETF.com, suggesting that if the Nasdaq 100 rises by 1%, the ETF will climb by 1.04 percent. This is because the ETF's fundamental driver composition differs from the index, it has a differing beta value.  According to Yahoo Finance, the Aberdeen Standard Physical Gold Shares ETF (SGOL) has a beta of 0.08, which means that if the S&P 500 rises 1%, the gold ETF will advance only 0.08 percent. Since the ETF's fundamental drivers differ from stock ETFs, it has a lower beta value.  As a result, putting together an investment portfolio with composite or blended beta value can be an effective risk management strategy. If the equity markets fall, an investor can place himself with downside protection with a beta of 0.08, the Global Beta Low Beta ETF, For example, has low market fluctuations than the S&P 500 because the index is re-weighted on a revenue basis and is designed to reflect the results of components from the S&P 500 with a minor beta comparable to the S&P 500.  GBA restricts each index element at 5% through quarterly rebalancing to mitigate concentration risk at the issuer level. Similarly, fixed-income ETFs have lower beta values than stock ETFs since bonds are less volatile than equities.   A bond ETF that invests in investment-grade bonds is the iShares Core U.S. Aggregate Bond ETF (AGG). It has a low beta, implying it is not affected much by market fluctuations.  Investors might also look for volatile ETFs with elevated amounts of market-related volatility. The SPDR S&P Emerging Markets Small Cap ETF, for example, invests in small-capitalization shares in emerging markets. This ETF has a higher beta value.  In financial analysis, beta can be a precious instrument. Depending on the investor's risk tolerance, statistics can assist in determining which stocks are generally steady and low or more volatile.   Investors who are risk-averse and would not want to be subject to higher risks (such as pensioners) should tend to favor ETFs with lower beta values in their portfolios.  Younger investors with a broader investing horizon, on the other hand, may prefer to own ETFs with greater beta values. Those ETFs are likely to have a higher risk-reward profile, making them a good option for youthful investors who have the luxury of time to ride out any losses. 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. Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world.    Connect with an expert advisor to get the right plan for you TALK TO AN EXPERT

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.  The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries   Let us talk about the consumer product: DSP World Agriculture Fund.  About the DSP World Agriculture Fund  Investment objective The primary investment objective of the Scheme is to seek capital appreciation by investing predominantly in units of BlackRock Global Funds - Nutrition Fund (BGF - NF).  The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. It shall be noted, similar overseas mutual fund schemes shall have investment objectives, investment strategies, and risk profiles/considerations similar to those of BGF-NF. The Scheme may also invest a certain portion of its corpus in money market securities and/ or money market/liquid schemes of DSP Mutual Fund, in order to meet liquidity requirements from time to time.   Portfolio composition  The portfolio holds major exposure in ingredients that account for roughly 15% of the portfolio. The top five sectors hold nearly 53% of the portfolio Note: Data as of 31st Dec 2022. Source: DSP MF  Top ten holdings DSP World Agriculture Fund Name Weightage % Deere & Co 4.9% FMC Corporation 4.8% Graphic Packaging Holding Co 4.7% Agco Corporation 4.4% Symrise AG 4.2% Salmar ASA 4.2% Zoetis Inc 4.2% Barry Callebaut AG 4.2% Grocery Outlet Holding Corp 4.1% Koninklijke DSM NV 4.1% Note: Data as of 31st Dec 2022. Source: DSP MF Performance Note: Data as of 31st Dec 2022. Source: DSP MF  The fund has generated a CAGR (Compounded Annual Growth Rate) of 6% since its inception.  Fund manager  Mr. Jay Kothari, Vice President & Product Strategist has been managing the fund since March 2013. He is the dedicated Fund Manager for overseas investments and has been with DSP Investment Managers since May 2005, and has been with the Investment function since January 2011. Jay joined the firm as a member of the Sales team (Banking) in May 2005. Prior to joining DSPIM, Jay worked for Standard Chartered Bank for a year in the Priority Banking division. Jay completed his Bachelor of Management Studies (Finance & International Finance) from Mumbai University, followed by an MBA in Finance from Mumbai University.  Who should invest in DSP World Agriculture Fund?  Experienced Investors with a well-set core portfolio, looking to diversify no more than 10-15% of portfolio internationally.  Investors who strongly believe in the future growth potential of international agriculture-related companies and also have the sectoral understanding to 'extract value' from changing international agriculture sector cycles.   Investors looking for international diversification, especially in US companies & wanting to hedge portfolios.  Investors have the patience and mental resilience to remain invested for a decade or more and not look to chase the highest returns.  Why invest in this fund?  Offers the potential to grow your wealth by investing in the global agriculture & agri-related sectors.  Get access to sector-leading companies that are difficult to invest in directly for Indian investors like Koninklijke DSM, Tractor Supply Company, Costco Wholesale Corp, Kerry Group, Nestle, etc.   Time horizon  One should look at investing for a minimum of 10 years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The DSP World Agriculture Fund was launched in October 2011, and in its track record of eleven years, the fund has delivered ~6% CAGR consistently. Thus, it is best for investors who are willing to take international equity exposure in the portfolio with an agriculture bias and wants to remain invested for a longer period.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 

I came across a folklore about Mahabharat some time ago about how did Draupadi come to have 5 husbands. The story told that Draupadi had asked Shiva for a husband who was noble and strong, skilled with the bow, handsome and wise. Since no single man could possess all five traits, Shiva gave her five husbands, each with one trait. Just like it’s hard to find all your favorite qualities in one person, it is impossible to find them in one single stock. The solution here is mutual funds! It is the only investment option that gives you multiple benefits such as higher returns, lower risk, professional management, no lock-in, and low-ticket size.   What is a Mutual Fund?  The concept of mutual funds is very simple. Suppose I am a person who has a small investible amount but I do not know how to invest and generate good returns. Hence, I need some professional help. But the amount with me is so little that I won’t be able to get any professional help because the professional fees themselves would exceed the returns.   Like me, there are many people who have small amounts available with them but either doesn’t know how to invest or they don’t have resources such as time or information. In that case, such potential investors come together, collect their money, give it to a professional manager, and ask him to invest it on their behalf so that it can generate good returns and promise to pay him his fees from the return so generated. In order words, they make investments in mutual funds to get a profit.   A mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. It manages the investor's money by investing in securities to generate a return and charges its fees from that return generated and the remaining return is passed on to the investors. The only difference between the actual concept and the example given above is that instead of many people coming together and selecting a professional fund manager, the mutual fund collects the money from all the investors in real life. Types of Mutual Funds  There are different types of mutual funds based on various criteria. But on the basis of securities in which the funds are invested, there are broadly 3 types viz. Equity Mutual Funds, Debt Mutual Funds, and Hybrid Mutual Funds. In equity mutual funds, the funds are invested in the shares of various companies. This is suitable for long-term investments to generate higher returns. On the other hand, in debt mutual funds the funds are invested in debt securities of various corporations, government bonds, etc, that carry relatively lesser risk but also have very little potential for returns. And hybrid mutual funds invest in both equity and debt mutual funds so that you get returns better than debt mutual funds and take risk lesser than equity mutual funds Benefits of Mutual Funds  Higher Returns: Equity Mutual Funds have the potential to beat inflation and offer returns higher than FD, Gold, and Real Estate over the long term.  Lower risks: Since one mutual fund invests small amounts in various securities, your risk reduces because your money is not invested in a single security. This is called as reduction of risk through “Diversification”.  Professional Management: In mutual funds, the money is managed by professional fund managers who have the experience, knowledge, and skills to manage large amounts of money.  No Lock-In: Most mutual funds do not have any lock-in period. However, in the case of equity mutual funds, an exit load of 1% is applicable if the units are redeemed within 1 year.  Low Ticket Size: Minimum amount for mutual fund investments can be as low as Rs.500 p.m. Risks and disadvantages of Mutual Funds  Market Risk: Since the amounts are invested in securities, there would always be a market risk howsoever small.  No Guarantee: There is no guarantee that you would get a minimum of this much return or that your principal is protected.  Management Risk: There is a risk that the fund manager may not perform well and would not be able to generate the requisite return.  Points to be considered while deciding Mutual Fund Schemes  AUM of the Mutual Fund and the Scheme: Check the AUM of the scheme and the mutual fund house. It is better to go with a mutual fund having a higher AUM than a smaller one.  Expense Ratio: Check the expense ratio of the scheme. The lower the expense ratio better it is to invest.  Experience of the Fund Manager: Consider the professional qualifications and experience of the fund manager in managing the funds as it plays a crucial role in the management of your investments.  The objective of the Scheme: Decide whether the objective of the mutual fund scheme is in line with your goal other wise you will have to suffer a financial loss.   Investments in mutual funds are an easy and apt way to enter the market. It helps investors grow their wealth without the added stress of additional payments or monitoring the market for gains. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Deciding which category of mutual funds to invest in can be tricky especially when there is a number of options available. But if you are someone who is looking for stable growth and unwilling to take too much risk at once, then high-dividend-yielding mutual funds are the category you should definitely have a look at!  What is High Dividend Yield Mutual Funds?  Before getting into what is high dividend yield mutual fund, let us first understand what dividend yield actually means. Companies distribute their profits to the shareholders by way of dividends. So, if I were to invest in any company, I need to know how much return I would generate if I invest today. That’s exactly what dividend yield is. It is nothing but a dividend paid per share as a percentage of the current market price of the share. High dividend yield mutual funds are basically funds that are looking to invest in those companies well known for such high dividend yield.  The objective of these funds is to predominantly invest in dividend-yielding stocks and generate regular income for its investors. Hence these are also known as Income Funds. These are open-ended equity funds which mean they are compulsorily required to invest a minimum of 65% of the total assets in equity. And generally, fund managers prefer those companies that have relatively stable earnings and higher dividend payout. Benefits of Investing in Dividend Yield Funds  Investing in Companies that generate profits: Since dividends can be paid only if the company has earned distributable profits, these schemes invest only in such companies that have a good track record of generating high profits and distributing them. Also, generally but not compulsorily, these are the large companies that pay consistent dividends such as ITC, HUL, Infosys, etc.   Regular Income: Investors can get steady income flows by investing in Dividend Yield Funds as companies generally maintain their range of dividend payments.  Capital Appreciation: While primarily the fund is focused on high dividend yield stocks providing regular income, it also has the potential for capital appreciation.  Reduced Volatility: Since the funds are invested in companies that generate high and consistent profits, the prices of the shares are relatively less volatile as compared to growth stocks and hence Dividend Yield Funds provide a good option to reduce the volatility of your portfolio.  Risks or Limitations of Dividend Yield Mutual Funds  Limited Capital Appreciation: Since the funds are invested in companies that give higher dividends, there is a limited scope of capital appreciation as compared to funds that invest in growth stocks.  Taxation of Dividend: Currently the dividend is taxed in the hands of investors but if in the future the same is taxed in the hands of companies then the returns of the Dividend Yield Funds would be impacted as companies would be reluctant to pay dividends.  Market Risk: Like all mutual fund investments, dividend yield mutual funds are subject to market risk.  Who should invest?  Considering the structure, benefits, and risks of the Dividend Yield Funds, it can be said that a person who is looking for steady income flows with limited growth potential and who does not want to take risks aggressively by investing in small companies such as pensioners or retired people can consider these funds.  List of High Dividend Yield Mutual Funds Following is the list of Dividend Yield Funds in India  *Data as on 03rd Feb. 2023, Source – AMFI, EduFund Research Consult an expert advisor to get the right plan TALK TO AN EXPERT

An inverse ETF (exchange-traded fund) is a type of ETF that rises when the underlying asset prices fall.   Contrarian traders who want to profit from the decrease in the value of an asset generally tend to use such instruments. Contrarian investing is the investment strategy of profiteering from trading against the market direction.   For example, if the market is bearish, i.e., falling, the contrarian investor is bullish, i.e., expects growth, and hence will look for buying prospects.  Simply put, when the index 'sees' the ETF 'saws.' illustratively.  Inverse ETFs are similar to short-leveraged ETFs but differ in the gearing ratio. The gearing ratio is the means of measuring financial leverage to equity. Inverse ETFs generally have a gearing ratio of 1, whereas short-leveraged ETFs can have a gearing ratio of 2 or 3.   Short-leveraged ETF is ProShares UltraPro Short QQQ which provides a 3x daily short exposure on Nasdaq 100. Inverse ETF is ProShares Short Russell2000 which provides a 1x daily short on the Russell 2000. The inverse of an ETF is also called a short ETF or a Bear ETF Like short-leveraged instruments, inverse ETFs also hold swaps to achieve their exposure. A short Russell 2000 will hold swaps paying the return to the counterparty. If the index trades up, the fund will pay the return to the counterparty, decreasing the ETF value; otherwise, the index goes down.   The ETF rebalancing needs daily attention to achieve this kind of balance. Inverse ETFs are balanced daily; hence they are best suited as a short-term instruments.   In the long run, the ETF will exactly replicate the index; on the contrary, no guarantee of direction.  The illustration below helps us comprehend this with ease DaysDaily market performanceExpected index levelExpected 1x Inverse ETF levelDaily ETF performance00%100100 1-5%95.00105.005%2-5%90.25110.255%3-5%85.74115.765%4-5%81.45121.555%5-5%77.38127.635%6-5%73.51134.015%7-5%69.83140.715%8-5%66.34147.755%9-5%63.02155.135%10-5%59.87162.895%10-day cumulative change -40.1362.89  There are significant differences between holding an Inverse ETF and short selling. Short selling requires a margin account. The trader borrows these securities to sell at a higher price to other traders, and they can repurchase the asset at lower prices, thus winding up the trade by returning the lent securities.   However, there is a risk of costs rising after a short time in short selling, which exposes the investor to a virtually unlimited upside. When an investor has an inverse ETF, and the underlying exposure is going down, the investor's exposure in ETF is going up, i.e., the ETF NAV moves up, increasing the notional exposure to the position if the overall direction is correct.  Thus, this is precisely the opposite of what happens in short selling. Inverse ETFs allow the investors to short with a maximum loss of the value of the ETF, i.e., the NAV of the ETF. Inverse ETF NAV moves up when the market is going down and converse if the market is falling. Several types of inverse ETFs can be used to profit from declines in the market indices, such as Russell 2000 or Nasdaq 100. Some ETFs are also sector-specific such as energy, banking, FMCG, etc. Some investors use these inverse ETFs to hedge their portfolios against falls.   For instance, if an investor owns an ETF tracking the Nasdaq100, he could hedge his position with an inverse ETF that tracks the Nasdaq100.  However, such hedging can have its own set of risks since one of them is sure to make a loss in your portfolio. While this may appear appealing, losing money is also significant.  Inverse exchange-traded funds aren't for everyone or even most investors. More experienced traders who understand what they're investing in and why are better suited to use them.   Regular ETFs can still provide strong returns, and investors should stick to lower-risk products that can still generate attractive returns. FAQs Are inverse ETFs a good idea? An inverse ETF is a high-risk investment option that may not suit risk-averse investors. This investment vehicle is suitable for highly risk-tolerant investors who are comfortable with the risk that inverse ETFs possess.   Who buys inverse ETFs? Inverse ETFs are for highly risk-tolerant investors. Inverse exchange-traded funds aren’t for everyone or even most investors. More experienced traders who understand what they’re investing in and why they are investing in a particular asset are better suited to use them. What is an example of an inverse ETF?   Several types of inverse ETFs can be used to profit from declines in the market indices, such as Russell 2000 or Nasdaq 100. Some ETFs are also sector-specific such as energy, banking, FMCG, etc. Some investors use these inverse ETFs to hedge their portfolios against falls.    For instance, if an investor owns an ETF tracking the Nasdaq100, they could hedge their position with an inverse ETF that tracks the Nasdaq100.    What does an inverse ETF do?   An inverse ETF (exchange-traded fund) is a type of ETF that rises when the underlying asset prices fall.   Inverse ETFs are similar to short-leveraged ETFs but differ in the gearing ratio. The gearing ratio is the means of measuring financial leverage to equity. Inverse ETFs generally have a gearing ratio of 1, whereas short-leveraged ETFs can have a gearing ratio of 2 or 3.    Short-leveraged ETF is ProShares UltraPro Short QQQ which provides a 3x daily short exposure on Nasdaq 100.   Inverse ETF is ProShares Short Russell 2000 which provides a 1x daily short on the Russell 2000.   Consult our expert to discuss the right plan for you.  TALK TO AN EXPERT