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Exchange Traded Funds: Why are ETFs Inexpensive? Details here

Those who want to invest must note that Exchange Traded Funds (ETFs) are an excellent investment product for all types of investors. A potential investor also needs to know that ETFs are also cost effective. For more information, please visit the National Stock Exchange (NSE) official website at nseindia.com.

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NSE India recently tweeted from its official Twitter handle about how affordable ETFs are. The tweet said, “ETFs are cost effective and here’s why. Read more about ETFs here >> bit.ly/3HjDfRA.”

ETFs are cost effective and here is why. Read and learn more about ETF here >> https://t.co/cRefrlb4dG #NSE #ETF pic.twitter.com/7e8Y2HVByV

– NSEIndia (@NSEIndia) November 14, 2021

According to the NSE website, ETFs have recently gained wider adoption as financial instruments, and many investors have noticed their unique advantages over mutual funds. These tools are beneficial for investors who are struggling to master the tricks of trading to analyze and select stocks for their portfolio. Various mutual funds offer ETF products that attempt to track the indices on NSE in order to generate returns that broadly match the total returns of the stocks represented in the index. The ETFs available on NSE are diverse. Equity, debt, gold, and international index ETFs are available.

The NSE notes that since an ETF is listed on an exchange, distribution costs are much lower and reach is greater. These cost savings are largely passed on to investors in the form of lower costs. The structure also helps reduce collection, withdrawal and other processing fees.

Due to the unique structure of ETFs, all types of investors, whether private or institutional, long-term or short-term, can use them to their advantage. They allow long-term investors to diversify their portfolio in one fell swoop at low cost and isolate them from short-term trading activities due to the unique in-kind creation / redemption process.

Since the initial investment is small, retail investors will find buying / selling easy and convenient. They make it easy for FIIs, institutions, and mutual funds to easily allocate assets, protect themselves, and c -italize on them at low cost. They enable arbitrageurs to arbitrage between the cash and futures markets with low impact costs.

For further details, those interested can register on the official NSE website at nseindia.com.

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