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Before moving to what emerging market ETF is, let's quickly learn what emerging markets are, their characteristics, and why they should be acknowledged whilst making a portfolio.  Emerging markets are countries that are increasing their manufacturing capabilities. They are moving away from agriculture and raw material exports, which were once their main sources of income.  Governments in emerging countries want to improve the lives of their citizens. They are fast industrializing and transitioning to a mixed economy or free market. Brazil, China, India, Russia, etc., are some examples of emerging economies.  Characteristics of emerging economies What does this mean?  There are numerous ways to profit from emerging markets' high growth rates and prospects. The best option is to invest in a fund that focuses on emerging markets.   Many funds either track the MSCI Index or strive to outperform it. This helps save a load of effort. It is unnecessary to conduct extensive research into foreign firms and economic policies.   It also lowers risk by distributing investments across various emerging markets rather than just one.  However, emerging markets are not all equal in terms of investment potential. Since the global financial crisis of 2008, some countries have used rising commodity prices to boost their economies.   They did not put money into infrastructure. Instead, surplus funds are used to fund subsidies and new government employees. As a result, their economies grew swiftly, their citizens bought a lot of imported goods, and inflation became a problem immediately.  Brazil, Hungary, Malaysia, Russia, South Africa, Turkey, and Vietnam. Governments can encourage foreign direct investment by keeping interest rates low.  It was well worth it, even if it did assist in raising inflation. The countries received tremendous economic growth in exchange.  Emerging market funds are mutual funds or exchange-traded funds that invest in publicly traded companies based in an emerging country or region.   Funds might target specific geographic areas or invest in a single country. While an emerging market fund does not have to invest solely in developing markets, it should have most of its holdings in that sector.   The remaining holdings could be more extensive domestic holdings that make capital investments in the economy's development. As Hyundai has made significant investments in plants in India, an emerging market fund investing in India may also hold Hyundai stocks.  Emerging Markets ETFs have $330.14 billion in assets under management, with 233 ETFs trading on US exchanges. The cost-to-income ratio is 0.58 percent on average.   With $79.22 billion in assets, the Vanguard FTSE Emerging Markets ETF VWO is the largest Emerging Markets ETF. MEXX, the best-performing Emerging Markets ETF in the previous year, returned 80.89 percent.   The VanEck Digital India ETF DGIN was the most recent ETF to launch on February 15, 2022.  Top emerging market ETF issuers by AUM.  IssuerAUM in $ billionNumber of fundsBlackrock Financial Management112.4014State Street7.124Invesco1.665Charles Schwab13.892First Trust0.645 Top and Bottom performers in the category of ETFs Top ETF Performers according to etf.com  TickerFund NameTrailing 30-day price TR changeYANGDirexion Daily FTSE China Bear 3X Shares28.44%FXPProShares UltraShort FTSE China 5018.58%EDZDirexion Daily MSCI Emerging Markets Bear 3x Shares17.37%CHIEGlobal X MSCI China Energy ETF15.04%BRZUDirexion Daily MSCI Brazil Bull 2X Shares13.19% Bottom ETF Performers according to etf.com TickerFund NameTrailing 30-day price TR changeRUSLDirexion Daily Russia Bull 2X Shares-85.12%RSXVanEck Russia ETF-70.31%FLRUFranklin FTSE Russia ETF-59.40%RSXJVanEck Russia Small-Cap ETF-44.38%YINNDirexion Daily FTSE China Bull 3X Shares-24.81% Emerging markets offer investors a great way to diversify their portfolios without sacrificing growth.   While the investments are more volatile, the underlying firm frequently enjoys significant growth as the new market grows. Before investing in emerging economies, investors should do their homework. FAQs What are emerging market ETFs? Emerging market ETFs are mutual funds or exchange-traded funds that invest in publicly traded companies based in emerging countries or regions. These funds typically target specific geographic areas or invest in a single country, with most of their holdings in developing markets. Why should investors consider investing in emerging market ETFs? Investing in emerging market ETFs offers the opportunity to diversify portfolios and participate in the high growth rates of emerging economies. These ETFs distribute investments across various emerging markets, reducing the risk associated with investing in a single country. How do emerging market ETFs differ from other funds? Emerging market ETFs focus on investing in companies based in emerging economies, whereas other funds may have a broader scope. These ETFs allow investors to gain exposure to the growth potential of specific regions or countries within the emerging market sector. What are some top-performing and bottom-performing emerging market ETFs? According to etf.com, some top-performing emerging market ETFs include YANG, FXP, EDZ, CHIE, and BRZU, with notable price increases over a trailing 30-day period. Conversely, some bottom-performing ETFs in this category include RUSL, RSX, FLRU, RSXJ, and YINN, with notable price decreases over the same period. Note: The specific performance of ETFs may vary, and investors should conduct thorough research before making investment decisions in emerging market ETFs. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Mutual Fund vs FD is a long-standing debate in the financial arena. While one offers fixed and stable returns, the other offers a chance at wealth generation.  Fixed Deposits are the most popular and favored investment mode among Indian households. And why not! It feels safe to have an investment that guarantees a risk-free return. An FD allows you to put a lump-sum amount with the bank with a fixed interest rate and lay back for a good long period. Once the deposit matures, you can withdraw your money and enjoy the interest earned over the selected period.  Mutual Funds enable you to pool your money and earn a return. Every Mutual Fund has a portfolio manager who invests your money into stocks according to your risk appetite and ROI. Therefore, the return on Mutual Funds depends on the market conditions. Unlike fixed deposits, it does not have a lock-in period. Choosing the right investment journey for your child is the primary concern for every parent. If you are confused between Mutual Funds and Fixed Deposits, then look at both these investment options from various standpoints.  Inflation-adjusted rate of return  Inflation is the most crucial yet commonly ignored aspect of investment. It is the rate at which the value of your money decreases with time. Inflation reduces your purchasing power and creates financial instability.  In India, FDs do not offer an inflation-adjusted rate of return. The maximum rate of interest on FDs is 5% to 7%. However, the inflation rate in recent years has been recorded somewhere between 4-6%.  Inflation-adjusted return that you receive adds zero value to purchasing power. Instead, if the inflation rate goes higher than the interest rate, you will likely lose the money you have invested.  On the other hand, Mutual Funds are highly responsive to the market conditions. Also, they come with the benefit of compounding on SIP investments. You can start with an amount as low as Rs. 500, and your money will grow every month. Mutual Funds, especially equity-based mutual funds, are influential enough to adjust the impact of inflation on your money.  Risk Factor Fixed deposits feel safe on the surface because they are government-regulated. But, when it comes down to investing in your child’s education, the risk against this safety goes scary. The need of the hour is to grow your money. FDs may keep your money safe but add nothing to growth.  Mutual funds, however, allow you to mitigate the risk through portfolio diversification. You can identify your risk appetite and stash your money accordingly. Moreover, you have experts who guide you through your investment journey and help you attain your financial goals.  Tax Implications Tax payable on fixed deposits is subject to the Slab rate under the Income Tax Act, 1961, as amended from time to time. Also, the interest that you earn on FDs is tax-exempt under sec 80 TTB to the extent of Rs. 50,000.  Whereas, Mutual Funds listed under Capital Gains are taxable. The tax rate would vary depending on the Mutual Fund and its income. The duration for which the Mutual Funds are held before the sale is significant for taxation purposes.  Source: Freepik Liquidity  Keeping the persistent trend of Education Inflation in mind, it isn’t wise to lock your money into Fixed Deposits. Once you make a choice, you can not withdraw until maturity.  Mutual Funds come with no lock-in and are highly liquid. You can choose between a lump sum and a SIP investment. It enables you to start small but earns high market-based returns. You can take away your money at will! What are mutual funds? Read More Wealth generation With the pace at which the colleges are upscaling their fee structures, it has become challenging to keep up with the cost. Therefore, parents don’t just have to save but ensure wealth accumulation to pay for the price.  Unfortunately, fixed deposits fail here. The ultimate return you receive from an FD would fall far below the level of return you need. However,  if planned early and the right way, mutual funds are incredibly potent to help you reach your target. All you need to do is make the best out of the investment. Start early and extract the magic of compounding! Parents need to look at the broader picture when choosing an asset for their child’s education. Due to their low Inflation-adjusted return, fixed deposits are likely to fail as productive assets. And, it doesn’t matter how safe FDs are if they don’t help you meet your desired goals.  Mutual Funds offer you a safer opportunity to invest in stocks, especially if you don’t have the financial knowledge. Moreover, you don’t have to stress your pocket to invest. All you need is the magic of the 3Ps: planning, patience, and persistence! FAQs 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. What is an FD? Fixed Deposits are the most popular and favored investment mode among Indian households. An FD allows you to put a lump-sum amount with the bank with a fixed interest rate and lay back for a good long period. Once the deposit matures, you can withdraw your money and enjoy the interest earned over the selected period. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we read about how to save your child from the student debt trap. In this article, we will read what is inflation and how it affects us. According to the International Monetary Fund (IMF), "Inflation is the rate of increase in prices over a given period.   What is inflation? Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated for certain goods, such as food, or services, such as a haircut or travel cost.   Whatever the context, inflation represents how prices of the relevant set of goods and services have increased over a certain period.   Inflationary pressure suggests that you will have to pay more for the same goods and services this year compared to last year. If you possess the assets before the price rise, such as homes and stocks, this can help you.   But if your income does not keep up with Inflation, your purchasing power diminishes. Inflation raises your cost of living over time, and it can be harmful to the economy if it is high enough.  High Inflation has far-reaching consequences for a country's economy. Tips to protect savings from Inflation Read More Let us see some ways in which inflation affects us 1. Erodes purchasing power Inflation causes a decrease in the purchasing power of your currency due to a rise in prices across the economy. With the increase in the general price level (without an equivalent rise in your income), your ability to purchase goods with the given money decreases.  https://www.youtube.com/watch?v=75tJ3oX1_Gw 2. Causes more inflation When Inflation is stepping in, people tend to buy more stuff in anticipation that the prices will rise further in the future. So, this desire to spend produces a potentially disastrous loop in the face of this desire to spend.   People and businesses are spending faster and more to limit the amount of time they hold their deteriorating money, resulting in an abundance of cash that no one wants.   In other words, the supply of money exceeds the demand, causing the price of money and the purchasing power of currency to fall at an increasing rate.   People grow frantic to get rid of their money, so every payday becomes a frenzy of spending on anything that isn't becoming increasingly worthless.  https://www.youtube.com/watch?v=jPHG8h87Dzo 3. Lowers the cost of borrowing When a business borrows money, it may pay back the cash it receives with the cash it earns later. The basic rule of Inflation says that the value of a currency tends to decline over time.   So, in other words, the cash now is worth more than the cash in the future. Thus, Inflation lets debtors pay lenders back with money worth less than when they originally borrowed it.   Effects of Inflation on Student Education Read More 4. Inflation and the cost of living The cost of living rises when prices rise. People have less money to meet their responsibilities if they spend more money to live (assuming their incomes haven't increased).   People's purchasing power falls due to rising costs and stagnant income. As a result, consumers may require more time to repay earlier loans, allowing lenders to collect interest for a longer time.   Also, it is worth noting that some inflation is good for the economy. In its mild form, inflation has a positive effect as well. People who anticipate inflation are more likely to spend now rather than later since they know prices will rise in the future. Consumer spending is the engine that propels economic growth forward.  As general consumers in the economy, to beat the brunt of inflation, we need to keep our money in safe assets and as little as possible in terms of cash. If we keep our money in assets that provide higher returns than the inflation rate, our money will grow over time. FAQs How is purchasing power related to inflation in India? Inflation causes a rise in prices across a nation's economy. This, in turn, decreases purchasing power as the general price level becomes comparatively higher than the rise in one's income. What's the inflation rate in India? The average inflation rate per year was 7.5% from 1960 - 2021. This means that an item that used to cost ₹100 in 1960 was priced at ₹7,804.85 at the beginning of 2022. What's an acceptable inflation rate? Although a formal inflation target hasn't been established by The Federal Reserve, policymakers generally consider 2% or below to be an acceptable inflation rate.

In the previous article, we read about why choose SIP to save for your child’s higher education. In this article, we will read the best time to start investing in your child’s education.  As an Indian parent, you aim to prioritize your child’s needs before yourself and strive to provide them with all the comfort and luxury in the world. Eventually, all the comfort you bring to your child’s life exemplifies how protective you are of them. And, out of all the beautiful things that you do for them, education is the greatest gift you give.   Yet quality education comes at a high cost, especially in an economic climate that is affected by the global economic crisis and political turmoil. These events affect your purchasing power, devalue your savings and affect your lifestyle and future needs. The only way to escape this vicious cycle is through smart planning and saving on time.   Why is it important to save and invest early in your child’s education?   The simple answer is inflation. Inflation in the education sector is escalating at a scary rate. It is painful to see that your hard-earned money will likely lose its value over time and may not suffice to protect your child’s future. Thus, the earlier you start planning your child’s education journey, the better it will be for their bright future.  In other words, it's time to not only save but grow your money to meet the needs of the future. Investing enables you to increase your money and retain your purchasing power. However, you must invest smartly.  There are several aspects associated with investing. The two main factors that affect your investment strategy are Risk and Return. The general rule of investing is higher risk and higher return. Based on your risk appetite, and short-term and long-term needs, you can accumulate your desired corpus over time. Another powerful rule of investing lies in longevity; the longer you stay invested, the greater your reward.  Here is how investing early can yield greater returns  Kartik is blessed with a baby girl. After a month of her birth, he chooses to invest a monthly SIP of Rs. 5,000 at 10% for 20 years. This way, he makes a total investment of Rs. 12,00,000 over the said period.   On the other hand, his friend Pratyush waits for his son to reach the age of 10 to start investing. He invests the same amount at the same rate of return but for a smaller period. He makes a total investment of Rs. 6,00,000 over ten years.   When their kids attain the age of 20, Kartik receives an accumulated corpus of Rs. 38,28,485. Whereas, Pratyush receives Rs. 10,32,760 as a return on investment. The growth rate for Kartik has been 3.2 times the investment, whereas Pratyush could receive only 1.72 times. But why is there a vast disparity despite the same amount of investment?   The disparity is a result of time. The longer your money stays invested, the more you get in return. That’s the magic of compounding! So, the best time to invest in your child’s higher education is NOW!  The longer your money stays invested, the more rewards you yield. Let’s find out what are the benefits of early investing.   4 benefits of early investing   1. Time Value of Money  When we talk of money and investing, time is an invaluable asset. The amount and the duration for which your money stays invested contribute significantly to the education corpus. The longer it stays invested, the higher return you get.   2. Acceleration through Compounding  Compounding is the return that you get on your return. It means you don’t just get the return on what you spend out of your pocket but also what you earn from it. As a result, your corpus gets richer with time.   3. Manageable Sums  You can start your investment journey early with a manageable sum. A delay would put an unnecessary burden on your pocket. Whether you start early or later, you need to save to meet the growing cost of education. Why put yourself into unnecessary trouble?  4. Higher scope for modification  In the above example, Kartik had assumed Rs. 40,00,000 to be the cost of his daughter’s higher education. However, when her daughter is ten years old, he realizes that the price may rise to Rs. 50,00,000. This situation will not bother him much because he can quickly meet the increased requirements. But things would not go the same way for Pratyush because he will have a considerable gap to fill just because he started late.  The education industry is highly competitive; over the last three decades, the cost of higher education jumped more than 500%.To ensure your child has all the amenities and a bright education, you need to start working on your savings. Our advice is to start easy, start small, but start early! Consult an advisor to get the right plan for you TALK TO AN EXPERT

SIP stands for Systematic Investment Plan; It is an ideal way to invest in your child’s higher education because it allows you as a parent to stay invested for the long term in a disciplined fashion and reap the benefits of compounding.   A SIP helps you set aside a fixed amount (weekly, monthly, or quarterly) based on your goals and make timely investments without feeling overwhelmed.       Why should you save for your child’s education?  Education is expensive more than ever before. The average cost of education has jumped more than 500% in the last 3 decades due to a myriad of reasons like inflation, greater demand, infusion of technology to education, and improved infrastructure.   According to the National Sample Survey Office (NSSO) report, the annual cost of education in 2014 increased 2.75 times while the per-capita income had only increased by 2.49 times. Showcasing the great disparity between cost in education cost as compared to growth in household income.  Conducted in 2017-18, NSSO’s 75th round survey of “Household Social Consumption of Education in India” stated that a majority of Indian families find it exceedingly difficult to afford tertiary education due to the rising school fees, and secondary costs like uniforms, transport, and school supplies.  This increase is reflected in annual fees across Indian educational institutions. An engineering degree, for example, can cost up to Rs. 4 lakhs per year at some universities. If this continues, in the next 15 years, the same degree can cost up to Rs. 15 lakhs per annum.  The  increasing cost of education is a huge financial burden on many parents; a medical degree from a private college in India can easily cost up to Rs. 1 crore. In fact, a majority of Indian parents have to send their children to study medicine abroad due to the inability to pay for private college fees in India.   Another factor that affects education costs is the depreciating value of the Indian rupee against the dollar. The weakening of the rupee can increase the overall cost of education for parents whose children are studying and living abroad.    Let’s consider how you can rise above this expanding cost of education.    What should a parent do amidst rising costs?  Careful and early financial planning strategies are the  key to beating inflation.  There are two facts that all parents should consider- starting early and staying consistent.   Early investing is the best way to prepare for future costs. It helps in developing the healthy habit of saving for their higher education when they are young. The sooner you start saving the better. The perfect time to start saving for your child’s education can and should start before she/he is even born.   Consistency is the key! It is extremely important to be disciplined and consistent with the contributions to your child’s education fund. Whether you invest in Mutual Funds, ETFs, or Equity, the best and only way to approach the giant cost of education is through diligent financial planning. Source: Pexels What is the best way to start saving?   For long-term investments pertaining to higher education, systematic investment plans (SIP) in Mutual Funds are the ideal choice. A SIP is a recurring monthly investment in a Mutual Fund that is automatically debited from the listed bank account.  If you start investing while your child is young, a 10 to 15-year time frame has the potential to help you generate significant returns. A SIP of Rs. 15,000 a month for 15 years can help you save up to Rs. 1 crore.   A SIP gives you the freedom to increase the fixed amount as well. This technique is called the step-up SIP strategy. It can help you in the long run, as an investor because your income is likely to increase as you progress in your career or have a windfall.    Are mutual funds safe?  Mutual Funds are risky yet transparent products. This means that you can study and evaluate the performance of the fund before investing your money. Each Mutual Fund includes a factsheet and its financial performance is available to every potential investor.   Every Mutual Fund comes with a factsheet that includes pointers like the fund manager’s name, the fund’s objective, starting date, benchmark index, and corpus size. This allows you as an investor to analyze its performance over the years and compare its progress with other mutual funds. While it does not guarantee 100% returns, it is a profitable investment choice for those who wish to invest in the long run.   If you are someone who is planning to build a healthy college fund for your child then a SIP is the most effective way to save up and diversify your investments against inflation.  

As an investor, there are many standard rules of money-making that you might have come across. In this article, we will learn about the very famous 15*15*15 rule. We will discuss the compounding magic that works wonders here.   The rule says that if you invest Rs 15000 per month for 15 years and generate 15% returns annually via a SIP in an equity mutual fund, then at the end of the 15 years, you will have an accumulated wealth amounting to Rs 10,027,601 (Rs 1.00 crore).   Breaking it down, we see that the total investment amount over the 180 months is Rs 15000 x 180 = Rs 27,00,000 – this means that the total returns you generate are equal to Rs 73,00,000.   The rule is so powerful that if you double the investment period from 15 years to 30 years, your accumulated wealth will equal Rs 10.38 crores (wealth increases 10x times).   The staggering figures that appear above are the result of compounding. What is compounding interest?  Compound interest implies interest earned on interest. The magic happens when you keep adding funds to your investment and do not break it.   As your invested value grows every year, the base (on which returns are generated) increases. The return generated also rises with time - this is how a very normal amount of Rs 15000 per month can lead you to become a crorepati in 15 years.  A time frame of investment is an essential factor when we talk about compounding. The more time you give your investment, the more returns you will generate. This is because your investment base is growing bigger and bigger over time.   As we saw above, doubling the investment time increases the wealth corpus by ten times.   Let us take an example to see how compounding works. Assume that person A starts to invest from the age of 20 and stops investing at 30 years of age, whereas person B starts to invest from 30 years until his retirement at 60 years. The table below clearly illustrates the magic of compounding.   Person A turned out to be the smarter among the two investors because he started his investment journey ten years earlier than person B and thus, was able to amass a fortune even with just one-third of the investment amount of person B.   The most considerable teaching that the 15*15*15 rule gives us is giving our investments ample time in the market; more importantly, the earlier you begin, the richer you become.   Mutual funds offer you high flexibility in switching from one category to another, with redemption at desirable times. To take advantage of compounding, start your investment journey today.

The RBI and the Monetary Policy Committee came up with an expected but unscheduled move on 4th May 2022, increasing the repo rate by 40 basis points to 4.40% and increasing CRR (Cash Reserve Ratio) by 50 basis points to 4.50%. Here’s why the RBI took this stance Heightened inflation globally is an alarming situation that is spreading fast. Geopolitical tensions have caused an increase in Inflation. Inflation is at the highest level in four decades, in the United States. Here are some factors compelling the RBI to re-visit the policy. International crude oil prices are hovering above $100 per barrel, tempting domestic pump prices to an all-time increase. Global food prices have been steadily increasing since October, touching a new record high in March 2022 due to global wheat shortages. Inflation breached the upper limit of 6% in the last three months, above the RBI’s target. CPI (Consumer Price Index) touched a 17-month high of 6.9% in March, while WPI (Wholesale Price Index) stood at 14.55%. Liquidity in the market is in surplus, causing elevated inflation. To crunch this liquidity from the economy interest rate needs to be revised. So, the interest rate cycle has finally started, and rates are likely to move further up. What does this mean for your savings, borrowings, and investments? Read on to find out. Impact on Savings or Fixed Deposits There has been an outcry about low FD (Fixed Deposits) rates offered by financial institutions. But now the change is here: The FD investors will now enjoy a little higher rate than the previous one. The rate increase will initially affect the short-term FD rates. Short-term FD will see a quick change in the rates, and for long-term FD, it will take some time. For long-term investments, investors should wait for another rate hike. Impact on Borrowings If you have an existing loan at a floating rate loan, then you can see a marginal hike in the EMI, or you may not see it. As banks usually just increase your EMI tenure, the impact is not directly visible. If you are looking for a new loan, you will witness a marginal increase in the lending rate by the lenders. It is important to consider applying for a loan before the next hike in interest rate. Impact on Investments in Equity Whenever there is an increase in interest rates, the equity market tends to behave inversely. Low-interest rates will lift the equity market, and high interest rates will drag the equity market. So, if you have invested in the equities, you should reset your expectations from the investments. The market may give lower returns than what you anticipated, earlier, in the short term. However, if you remain invested, you can benefit from the rupee cost averaging out at a lower price. Impact on Investments in Debt An increase in interest rates is going to affect the debt market inversely. The short-duration bonds and related instruments tend to provide high returns to their investors. For the time being, investors should avoid taking positions in long-term debt funds. Investors should consider taking a position in liquid funds, ultra-short duration funds, money market funds, and low-duration funds. There is no need to worry about short-term policy changes as long as you plan your financials accordingly. TALK TO AN EXPERT

Earlier we read about top 3 cheapest ETFs in terms of expense ratio. In this article, we will read related to the top three costliest ETFs in terms of expense ratio. Exchange Traded funds and mutual funds are two of the most successful long-term investment vehicles. You may even have some of it in your pension fund.   However, you may not have the awareness that a portion of your portfolio is allocated 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 spend an annual expense ratio out of our portfolios. You will learn about expense ratio and why is it essential, and how to spot a good one when you see one. What is an expense ratio and what does it mean?  The expense ratio is the fees that a mutual or exchange-traded fund charges an investor. This charge covers the costs of management, asset allocation, marketing, and other services.   The calculation of the expense ratio is done on an investor's annual expenditure. ETF expense rates are usually less than 1%. That means you spend less than $1 per year on expenses for every $100 you invest.  However, not all ETFs are this cheap to own; some ETFs have an expense ratio that might go into double digits.  Let us look at the three most expensive ETFs in terms of their expense ratio Rank ETF SymbolExpense Ratio1 VanEck BDC Income ETFBIZD10.07%2 Virtus Private Credit Strategy ETFVPC6.46%3 AdvisorShares Ranger Equity Bear ETFHDGE5.20% Let's have a look at these ETFs one by one.   1. VanEck BDC Income ETF  BIZD is a focused index of publicly traded private-equity companies in the United States: The ETF invests in the equity and debt of mid-sized private companies by purchasing shares of companies that invest in them.  To ensure diversification, the index selects the most significant and most liquid companies, considered Business Development Companies (BDCs), and weights them by market capitalization, with a cap of 20% per issuer.  Small and midcap stocks can be in the index too. The fund employs a sampling technique, which means it will not own all of the equities in the underlying index but will instead hold securities with similar investment profiles.   The index is re-evaluated every three months. Performance  Performance [as of 18/03/22]1 year3 years5 years10 yearsBIZD15.80%13.11%8.30%- The fund invests entirely in the United States Top 10 holdings Source: etf.com BIZD details BrandVanEckExpense Ratio10.07%YTD Return1.86%AUM$669.71MNumber of Holdings25Avg. Spread ($)$0.02Average Daily $ Volume$6.08M 2. Virtus Private Credit Strategy ETF  VPC is a fund that invests in US-listed closed-end funds to make money from private credit markets (CEFs). CEFs supervised as business development companies (BDCs) and non-BDC CEFs that concentrate on personal loans are the two primary types.   The BDCs use a variety of loan and equity structures to engage in middle-market companies with below-investment-grade ratings. Loans, CLOs, and senior loans are among the investments made by non-BDC CEFs.   The VPC index looks for consistent dividend payments over the last three years. Non-BDC CEFs are even further vetted to eliminate excessive price premiums or discounts compared to NAV. The dividend yield is the weight of the security.  Because the fund is a fund-of-fund, investors must anticipate spending twice as much due to cost compounding. The benchmark is rejigged every year and rebalanced every three months.   Performance  Performance [as of 18/03/22]1 month3 months1 year3 yearsVPC-2.87%-3.49%6.96%6.17% Peer Comparison ParameterVPCHNDLBrandVanEckStrategy SharesExpense Ratio6.46%0.97%YTD Return-0.72%-7.65%AUM$29.69M$1.61BNumber of Holdings5920Avg. Spread ($)$0.09$0.02Average Daily $ Volume$336.24K$20.79M 3. AdvisorShares Ranger Equity Bear ETF  HDGE builds a portfolio of short positions in large and midcap US-listed equities using a blend of quantitative and fundamental considerations.  This actively managed fund employs a bottom-up strategy to identify companies with poor earnings quality or ambitious accounting techniques and profit when market prices change to reflect the reality of these aberrations.   However, it is to be noted that a protracted bull market is a challenging environment for a short-only approach, and returns may reflect this. The fund's strategy also includes immediate purchases and sales of securities, which could result in a higher portfolio turnover and, as a result, lower returns.   Overall, HDGE has a solid asset base and can act as a substitute for traditional inverse equity funds.  Performance  Performance [as of 18/03/22]1 year3 years5 years10 yearsHDGE-0.85%-27.36%-21.58%-18.53% Peer Comparison  ParameterHDGESOGUBrandAdvisorSharesDe-SPACExpense Ratio5.20%0.95%YTD Return0.94%25.83%AUM$91.24M$24.79MNumber of Holdings50Avg. Spread ($)$0.05$0.20Average Daily $ Volume$4.01M$1.95M FAQs What are the top 3 costliest ETFs to invest in? The 3 costliest ETFs to invest in are AdvisorShares Ranger Equity Bear ETF, Virtus Private Credit Strategy ETF, and VanEck BDC Income ETF. What's the AUM of the current largest ETF? The AUM of the current largest ETF, SPDR S&P 500 ETF Trust, is $361 million. What are the hottest ETFs to buy in 2023? Some of the ETFs that investors can go for in 2023 are Energy Select Sector SPDR Fund (XLE), VanEck Future of Food ETF (YUMY), Vanguard Utilities Index Fund ETF (VPU), Invesco QQQ Trust Series 1 (QQQ), Schwab US Dividend Equity ETF (SCHD), etc.

Earlier we read about the top three ETFs in the small-cap category. In this article, we will look into the top three ETFs in the mega-cap category. However, before that, let's understand what mega-cap is. What exactly is Mega-Cap?  As measured by market capitalization, the largest corporations in the financial universe are mega-cap.   Mega-cap firms have a market capitalization of more than $200 billion, and the exact criteria vary depending on market conditions. Apple (AAPL), Amazon (AMZN), and Meta (FB), previously Facebook, are just a few of the companies that have significant brand awareness and operate in large regions around the world.  Overview of Mega Cap Mega-cap stocks often hold a substantial impact in various industry sectors due to the sheer size and volume of sales of goods and services in a given period.   For example, Apple has a market worth over $2 trillion due to continuing iPhone sales strength. Amazon has reached new highs thanks to the success of its retail operations and web services, and Facebook has renamed itself, Meta, to reflect its future focus.   Currently, there are roughly a dozen businesses listed on the New York Stock Exchange with market capitalizations exceeding $300 billion, most of which are in the technology industry.  The top three ETFs in the mega-cap category  Rank ETF1 iShares Global 100 ETF 2 Vanguard Mega Cap Growth ETF 3 iShares Russell Top 200 ETF  1. iShares Global 100 ETF  Overview  IOO's parent index, the S&P Global 1200, aims to provide market-cap-weighted coverage to 100 of the world's largest multinational companies. It lands firmly in the mega-cap rather than the large-cap area.   The fund completely avoids midcaps. It has some sector and geographic tilts due to its focus on mega-caps and the avoidance of emerging economies outside Korea.   The index tracks the performance of significant blue-chip corporations with international exposure. Companies must receive a substantial amount of their revenue and holdings from many countries to be deemed global.   The rejigging of the index is done every three months, beginning in March. The MSCI ESG Fund Rating of AAA for the iShares Global 100 ETF is 8.60 out of 10.   The MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables.  Performance  Performance [as of 03/02/22]1 year3 years5 years10 yearsIOO15.18%18.53%15.06%11.64%S&P Global 100 Index15.46%18.50%14.95%11.52% IOO Top 10 Countries exposure   IOO Top 10 Holdings  IOO details  BrandiSharesExpense Ratio0.40%YTD Return-5.52%AUM$3.61BNumber of Holdings104Avg. Spread ($)$0.07Average Daily $ Volume$18.12M 2. Vanguard Mega Cap Growth ETF  Overview  MGK targets the biggest growth businesses in the United States. It looks for companies with six growth characteristics: future long-term EPS growth, future short-term EPS growth, three-year historical EPS growth, three-year historical sales per share growth, current investment-to-assets ratio, and return on assets.   Combining all these six growth variables is used to score and rank securities. MGK delivers market-like exposure by having the same capitalization size split as its index and similar sector weighting.  MGK, like all Vanguard ETFs, only publishes its holdings once a month. The MSCI ESG Fund Rating for Vanguard Mega Cap Growth ETF is AA, based on 8.19 out of 10.  Performance  Performance [as of 03/02/22]1 year3 years5 years10 yearsMGK10.51%23.76%19.86%16.85% The fund invests entirely in the USA.  Top 10 holdings MGK MGK details  BrandVanguardExpense Ratio0.07%YTD Return-13.51%AUM$11.93BNumber of Holdings111Avg. Spread ($)$0.07Average Daily $ Volume$105.49M 3. iShares Russell Top 200 ETF  Overview  IWL provides a broad range of large-cap exposure. This simple fund invests in the top 200 US companies in the Russell 3000 Index, weighted by market capitalization.   The fund's portfolio has adequate allocations to household brands, representing around 68% of the US equities market. IWL is notable for having a somewhat skewed exposure at the top, as its focus on the top 200 stocks excludes large caps from the bottom.   Fund employs a representative sampling indexing approach rather than copying the index. Every year, the index is recreated and rebalanced. The MSCI ESG Fund Rating for the iShares Russell Top 200 ETF is AA, with a score of 7.78 out of 10  Performance Performance [as of 03/02/22]1 year3 years5 years10 yearsIWL14.57%19.17%15.88%14.98%Russell Top 20014.81%19.33%16.09%15.16% The fund invests entirely in the USA. Top 10 holdings IWL IWL details  BrandiSharesExpense Ratio0.15%YTD Return-8.05%AUM$959.11BNumber of Holdings201Avg. Spread ($)$0.05Average Daily $ Volume$14.09M One should look out at these ETFs before investing in the mega-cap category in the USA. FAQs What's the market value of the Mega-Cap category? The market value of companies under the Mega Cap category should be $200 billion or more. What are some examples of Mega-Cap companies? Some publically-funded companies with a market capitalization of $200 billion or more under the Mega-Cap category are Microsoft, Alphabet, Meta, Apple, Amazon, Nvidia, etc. Why should one invest in Mega-Cap stocks? Mega-cap stocks often offer stability, a proven track record, protection against market downturns, and potential dividend payouts. Consult an expert to get the right plan for you TALK TO AN EXPERT

Deciding where to live after getting your acceptance letter is a tough decision. Students are often torn between the two most popular forms of living abroad- student dorms vs. apartments. The idea of living on your own is both exciting and anxiety-inducing. Adulthood and its accompanying responsibilities can easily throw you into a tizzy. Having your own space comes at the cost of having to do your own chores, managing your own expenses, running errands and so much more. It can all be a little too much at times.  You’ve figured out what degree you want, you’ve figured out which college offers the best educational plan for you, and you have your parents convinced. Figuring out where to live and how to live is the next step. Should you go for university-provided student housing or should you rent your own apartment? There are certainly pros and cons to both and luckily we are here to help you figure things out! Student Dorms Vs. Apartments: What to Expect from Dorm Life? Dorms are a kind of student housing common in many universities. Usually, dorms consist of either shared or private bedrooms and common living and dining areas. Your college will allocate you a dorm room and a roommate based on the preferences you indicate, and in some cases, you can even choose your own roommate.  Colleges have different kinds of dorms and student housing available. You should go through your college’s website thoroughly to ensure you have the proper information about the kinds of dorms they have available, the facilities available in these dorms, how they are allocated, and the costs involved. Dorms are a very good option for Indian students who study abroad. Studying abroad means that you leave behind most of your friend circle and support structure. Student dorms in colleges have orientation programs and resident advisors who can help you ease into social life at your university. Pros of Living in Student Dorms No Dealing with Realtors or Brokers: Renting an apartment can be a complicated venture. You are not likely to know the area, the property costs, or the other intricacies of the real estate market when you're in a new city. Opting for college-provided student dorms may be a more reliable and secure option for you. No Extra Utility Bills: Utility charges like electricity, water, and heating are often covered by colleges. Even if they charge you extra for these amenities, these bills would still be relatively cheap. Proximity to Campus: Dorms enable you to stay on campus or very close to campus. This saves you both time and commuting costs. More Social Life: Staying close to campus enables you to enjoy campus life and student activities better. Additionally, dorms often have planned student events and activities that can help you make friends more easily. Extra Amenities: Student dorms often have extra amenities like recreational centers, gyms, game rooms, and TV rooms. These amenities may be entirely free or available to residents at a small charge.  Cons of Living in Student Dorms Lack of Privacy: Student dorms are notorious for being too crowded with barely any privacy. You may be able to get a private room depending on your college, but common areas may still lack privacy.  Strict Rules: Dorms often have strict rules to ensure discipline. You may have restrictions on how many visitors you can have, noise levels, cooking, and maybe even a curfew. You may not be able to experience the independence for which you decided to study abroad. Lack of Space: Dorms are often crowded and lack space. You may be allocated a tiny shared room with barely any space to move in.  Student Dorms vs. Apartments: What is apartment living like? Apartments are independent residential units that can be rented either by contacting the landlord directly or through a real estate broker. Apartments provide more privacy and independence than dorms and are generally more spacious. College websites and social media groups associated with your college may have information about localities with apartments for rent for students. You can go through these pages to find brokers, landlords, reviews, and other information. Pros of renting an apartment More Privacy: Apartments give you more privacy. You don’t have to live cramped together with too many people and there is more privacy in common areas even if you live with roommates. Additionally, you have more control over choosing your roommates than in the case of dorms. More Space: Apartments are definitely more spacious than dorms. You also get private bathrooms and a full kitchen to cook your own food without restrictions. More Independence: Renting an apartment makes you more independent and self-sufficient since it comes with more responsibilities and chores. You will also have to be much more meticulous with budgeting and expense management. If becoming more independent was a motive for you to choose to study abroad, apartment life may be best for you. Cons of Renting an Apartment Dealing with Landlords and Brokers: To rent an apartment, you will have to deal with brokers and landlords. As a young international student with limited knowledge of the country, this may be a complicated task for you. It is easy for you to get scammed or abused by brokers or landlords when you study abroad. Utility Bills: Unlike in dorms, you will have to pay your utility bills separately when you rent an apartment. This leads to extra expenses. Less Security: Living off-campus means you don’t have access to campus security. Apartment living may be less secure than dorms, although this also depends on the location of your apartment. More Traveling: Off-campus living certainly entails a lot more traveling and commuting. You cannot simply roll out of bed and go to class as you would in a dorm since you have to take into account commuting time. What is the Right Choice for You? There is no right or wrong decision when it comes to choosing the perfect student accommodation. It is up to you to decide what kind of housing situation is the best fit for you. You will have to weigh the pros and cons as well as the actual financial expenses of renting an apartment versus a dorm room. Your financial obligations and constraints will differ depending on whether you are studying abroad with a scholarship, self-financing, or working part-time jobs. These will need to be factored in, along with rental costs in the city you are in to determine which option is more cost-effective.  Whatever choice you make, living away from your parents and being exposed to a foreign country is sure to make you a more independent and well-rounded person. This is what makes studying abroad worth it. 

The Russell 3000 Index is an FTSE Russell index that measures the top 3,000 firms in the United States. It accounts for 98 percent of the investable equity market in the United States.  Continue reading to learn more about the Russell 3000 Index, including its operating, limitations, and differences from other indexes.  What is the Russell 3000 index?  Russell 3000 is a stock market index, ranking the top 3,000 publicly traded companies in the United States by the criteria of market capitalization. The Russell 3000 accounts for roughly 98 percent of all U.S. equities due to its broad participation.  Each year in May and June, the index's composition is such that there is consistency for both new and expanding companies that may enter the index and diminishing companies that may leave it.   Furthermore, the FTSE Russell Group, which manages the Russell family indexes, evaluates all newly qualified firms that come up with an IPO (Initial Public Offering) - owing to which, there may be 3000 companies on the index.  Russell 1000 Index Read More Functioning of the index  The index's operation is based on objective criteria that accurately gauge performance and economic hazards. All securities must be available for trading on one of the following U.S. exchanges: CBOE, NYSE, NYSE American, NASDAQ, or ARCA are examples of stock exchanges.   7 SPACs, limited liability corporations, royalty trusts, and business development companies are among the firms not allowed to participate.  SPACs, limited liability corporations, royalty trusts, and corporate development companies are among the firms that are not allowed to participate. Other qualifying criteria to assess for inclusion in the index.  1. Closing price On the day the index rates firms, stock closing prices have to be at or above $1. If it's less than $1, the average daily closing price for the previous 30 days has to be at least $1.  2. Total market capitalization To be considered for inclusion, businesses must have a total market value of $30 million or more.  3. Available shares A minimum of 5% of a company's shares must be available in the market.   Let's look at the sectoral weightings and some companies in the index  CompanyTickerApple Inc.AAPLMicrosoft CorpMSFTAmazon IncAMZNTesla IncTSLAAlphabet Inc Cl A (Google)GOOGLAlphabet Inc Cl C (Google)GOOGNvidia CorpNVDAMeta Platforms IncFBBerkshire Hathaway IncBRK.BJPMorgan Chase & CoJPMNote: Google appears due to diverse share classes. The Russell 3000 index limitations  The Russell 3000 ranks companies based on their closing price, total market capitalization, available shares, etc. However, it does not have a profitability criterion like other indexes, as the S&P 500 does.   Some Russell 3000 companies have not been profitable for four straight quarters. Investors should keep this in mind when evaluating the companies in the Russell 3000 index.  What is the Russell 2000 Index? READ NOW How to make money in the Russell 3000 index?  While buying individual shares of each firm represented in the Russell 3000 index is feasible – it is very time consuming for the average investor. It's significantly easier to buy an exchange-traded fund (ETF) or an index fund that tries to replicate the index's performance by holding the equities of its thousands of component companies.  iShares Russell 3000 ETF and Vanguard Russell 3000 ETF are some ETFs that invest in the Russell 3000 index. Along with ETFs, mutual funds like Vanguard Russell 3000 Index Fund and iShares Russell 3000 Index Fund invest in the above-said index.  Should you put your money in the Russell 3000 index?  The Russell 3000 index monitors the overall market but may over-represent large-cap firms due to its weighting - it may not be a negative thing when assessing the economy's performance, as these businesses are significant drivers of the economy's movement.   However, if you're using it as part of a broader index-fund-based investing plan that typically contains a perfect balance of large-cap, mid-cap, and small-cap firms, you may want to add additional indexes.   With this in mind, you may want to invest in the Russell 1000 and Russell 2000 indexes independently from the Russell 3000 – allowing you to obtain exposure to (almost) the entire spectrum of U.S. companies while retaining the opportunity to better adjust your large-cap to the small-cap and mid-cap ratio by purchasing extra Russell 2000 funds. FAQs What are some of the top companies in Russell 3000? The Russell 3000 Index contains about 96% of the US equity market. Some of the top companies under the index include Apple Inc, Amazon Inc, Meta Platforms Inc, JPMorgan Chase & Co, etc. How are companies ranked in the Russell 3000 index? The index ranks companies based on their total market capitalization, closing price, available shares, etc. What's the total market cap for the Russell 3000 index companies? To be considered for the Russell 3000 index, companies must have a total market value of $30 million or more. Consult an expert advisor to find the right plan for you  TALK TO AN EXPERT

Equity mutual funds are investment instruments that primarily invest in stocks of various companies across different sectors.   The aim of the fund manager is to maximize returns by allocating money among stocks with the help of screening criteria such as market capitalization or by investing in stocks of varying sectors.  Equity mutual funds are the riskiest category of mutual funds because of the high exposure (at least 65%, according to the rules laid down by the Security and Exchange Board of India) to equity markets.   However, this also leads to higher returns (on average) than other classes of mutual funds.  The risk involved in this investment arises from the general market conditions and the specific sectoral performance. A good option for investors looking to grow their capital over the long term, with considerable exposure to the stock market, is an Equity mutual fund.  Investment in these funds is possible through the SIP (Systematic Investment Plan) format and lump-sum format. Investors with different objectives and risk profiles have other options (among equity mutual funds) to invest in. Difference between Equity and Equity mutual funds  Direct investment into equity means purchasing stocks of listed companies directly through your Demat account.   In contrast, when you purchase an equity mutual fund, you are giving your money to the fund manager managing that fund to invest primarily in equity and some investment in other instruments to balance the fund.  While investing directly in equity, you have to decide which company to invest in and other related decisions. When you invest in equity funds, you choose to choose the fund, and the fund manager takes care of the further details, like the fund will constitute what companies' shares, in what ratio, etc.  Also, mutual funds offer diversification by giving us the option to make investments in diverse companies and sectors through an equity mutual fund, thereby exposing us to a more significant section of the market and possibly reducing our risk.   Investment in these funds is possible through the SIP (Systematic Investment Plan) and lump-sum formats. Investors with different objectives and risk profiles have other options (among equity mutual funds) to invest in. These are the main difference between direct equity and equity mutual funds investment source: freepik Different types of equity mutual funds 1. Categorization based on the market capitalization of companies Large-cap funds, Mid-cap funds, Small-cap funds, and Multi-cap funds.   Market capitalization tells us about the company's size; it is calculated as follows: Market Cap = Price of share * No. of shares outstanding  Companies having a market cap of more than Rs. 20,000 crores are known as large-cap companies. A mid-cap company has a market capitalization between Rs. 5,000 and Rs. 20,000 crores and small-cap companies have a market capitalization of less than Rs. 5,000 crores.  2) Sector funds These types of equity mutual funds invest the majority amount in particular sectors; that is, there is a concentration of investment into specific sectors in the economy, like FMCG, pharma, technology, PSUs (Public sector undertakings), etc.  3) Theme-based funds Theme-based equity mutual funds are pretty similar to sectoral funds because they invest in "themes" like ESG (Environmental, Social, Governance), Make in India, Digital India, and many other themes in the public and private sectors.  4) Focused funds Investments via these funds mean that more than 65% of investments are in equity only and related investments.  5) Contra funds Just as the name says, contra equity mutual funds follow contrarian investing methods – identifying potential market winners and investing in them.  6) Taxability-based categorization ELSS (Equity linked savings scheme) funds allow for deductions under section 80C of the Income Tax Act.  How do equity mutual funds work?  Equity mutual funds work simply. To state it in words, equity mutual funds invest more than 60-65% of their assets in stocks of different companies.  The fund manager tends to invest in names to maximize the overall return from the fund.  Are equity funds the same as mutual funds?  Equity funds are a type of mutual fund that primarily invests in equity shares of companies. FAQs Are equity mutual funds good? Equity mutual funds usually have a high potential to earn great returns among all mutual funds. However, with high returns, a high risk is also included. Hence, investors with a higher risk appetite are considered suitable for these funds. Which equity mutual fund is the best for me? Deciding the best equity mutual fund for oneself depends on a lot of factors that have been discussed above. However, here are some top options based on their annualized 5-year returns - PGIM India Midcap Opportunities Fund, Parag Parikh Flexi Cap Fund, Axis Midcap Fund, etc. Is equity mutual fund good as a long-term investment plan? Long-term investment plans bring wealth creation for investors. And that's where Equity Mutual Funds shine. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

The Dow Jones Industrial Average (DJIA) is possibly the most commonly followed financial market index globally. Yet, very few people know that it represents just 30 businesses.  The DJIA's Beginnings  The Dow Jones Industrial Average was set up on May 26, 1896. Charles H. Dow, one of the founders of Dow Jones & Company, came up with the Dow (formed in 1882).  The first Dow Jones index was constituted in 1884. There were 11 transportation-related stocks in the portfolio. The original index was called the Dow Jones Rail Average.   The Dow Jones Transportation Average was created in the 1970s to include air freight and other modes of transportation.  Dow soon discovered that industrial companies grew in value faster than railroads. He then created a new index by combining the stocks of 12 different companies.   It was dubbed the Dow Jones Industrial Average by Charles. Initially, it was the average of industrial firms in the cotton, sugar, tobacco, and gas industries. What is Dow Jones Industrial Average? The Dow Jones industrial average is a stock market index that tracks the Dow Jones Industrial Average (DJIA).  Dow Jones Industrial Average (DJIA), usually known as "the Dow Jones" or simply "the Dow," is one of the most well-known stock market indicators.   It tracks the daily stock market movements of 30 publicly traded firms in the United States, either on the NASDAQ or the New York Stock Exchange (NYSE). The 30 publicly-held corporations are among the economic leaders in the United States.  The Dow Jones Industrial Average components  There are no set criteria for a business's inclusion in DJIA's 30 company stocks. However, to be included in the DJIA, a corporation must make up a significant portion of its business in the US economy.   The corporation should also be registered on NASDAQ or NYSE and belong to the industrial sector's top players. CompanyStock Ticker SymbolIndustryLatest Addition to Index3MMMMConglomerate1976 / 08 / 09American ExpressAXPFinancial Services1982 / 08/ 30AppleAAPLTech2015 / 03 / 19BoeingBAAerospace1987 / 03 / 12CaterpillerCATConstruction1991 / 05 / 06ChevronCVXOil & Gas2008 / 02 / 19CiscoCSCOTech2009 / 06 / 08Coca-ColaKOFood and Beverages1987 / 03 / 12DisneyDISEntertainment1991 / 05 / 06DowDuPont IncDWDPChemical Industry2017 / 09 / 01Exxon MobilXOMOil & Gas1928 / 10 / 01Goldman SachsGSFinancial Services2013 / 09 / 20Home DepotHDRetail1999 / 11 / 01IBMIBMTech1976 / 06 / 29IntelINTCTech1999 / 11 / 01Johnson & JohnsonJNJPharmaceuticals1997 / 03 / 17JPMorgan ChaseJPMFinancial Services1991 / 05 / 06McDonald'sMCDFood1985 / 10 / 30Merck & CompanyMEKPharmaceuticals1979 / 06 / 29MicrosoftMSFTTech1999 / 11 / 01NikeNKEApparel2013 / 09 / 20PfizerPFEPharmaceuticals2004 / 04 / 08Procter & GamblePGConsumer Goods1932 / 05 / 26Travelers Companies IncTRVInsurance2009 / 06 / 08United TechnologiesUTXConglomerate1939 / 03 / 14UnitedHealthUNHManaged Health Care2012 / 09 / 24VerizonVZTelecom2004 / 04 / 08VisaVFinancial Services2013 / 09 / 20WalMartWMTRetail1997 / 03 / 17Walgreens Boots AllianceWBARetail2018 / 06 / 26 How are stocks weighed?  The DJIA is a price-weighted indicator – it means that businesses with more costly stocks are given more weight in the Dow. Market capitalization, the entire market value of all of a company's shares, is not factored into the DJIA's price weighting.   As a result, corporations with fewer pricey shares have a more significant impact on the Dow's value than companies with a large number of less expensive shares.  The Dow's strategy differs from other prominent indexes that measure the stock market's overall performance, such as the S&P 500 or the NASDAQ. When evaluating how much influence a firm will have in an index, these take its market capitalization into account.  What is the best way to invest in the Dow Jones Industrial Average? The DJIA can be used as a proxy for the overall performance of the US economy because its constituents are among the most significant public corporations. Many investors prefer index funds modeled on the Dow Jones Industrial Average.   Finally, If you purchase a new stake in a DJIA index fund, you have exposure to all 30 Dow components in your portfolio giving you simple access to businesses with a demonstrated track record of profitability and sound business practices. FAQs What is meant by the Dow Jones Industrial Average? Dow Jones Industrial Average (DJIA), usually known as "the Dow Jones" or simply "the Dow," is one of the most well-known stock market indicators.   It tracks the daily stock market movements of 30 publicly traded firms in the United States, either on the NASDAQ or the New York Stock Exchange (NYSE). Why is it called the Dow Jones Industrial Average? The Dow Jones Industrial Average was set up on May 26, 1896. Charles H. Dow, one of the founders of Dow Jones & Company, came up with the Dow. It is named after its founder. How are stocks weighed in Dow Jones Industrial Average?  The DJIA is a price-weighted indicator – it means that businesses with more costly stocks are given more weight in the Dow. Consult an expert advisor to find the right plan for you TALK TO AN EXPERT