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- W2267434080 abstract "Exchange Traded Fund are funds that follow a common index and traded like share in the financial market. ETFs may be attractive as investments because of their stock-like features, tax efficiency and low costs. The risk involved in ETF’s is very low. Because of all these features they are preferred by many. In this paper an attempt is made to know whether these ETF’s are really attractive investments and if so for whom? For this purpose the descriptive statistics, ADF and EGARCH test were used inorder to check the volatility, stationarity and risk involved in selected ETF’s traded in NSE. Introduction Exchange-Traded Fund was first started by State Street Global Advisors in 1993, with the introduction of the SPDR. They have continued to grow in popularity and gather assets at rapid pace. ETFs are like mutual funds that are traded like stocks. Trading like stocks is one of the main features that make ETFs popular with professional investors and individual investors who are active traders. An ETF is bought and sold on an intraday securities exchange and is composed of a basket of securities. Generally, ETFs will trade at (or very close to) the same price of the net asset value of the underlying assets. The first ETF in India, the “NIFTY BEES” (Nifty Benchmark Exchange Traded Scheme) based on Nifty 50 was launched in December 2001 by Benchmark Mutual Fund. Concept of ETF An ETF is a marketable financial instrument that tracks an index, a commodity, bonds, or a basket of assets. Unlike mutual funds, an ETF trades like a common stock in a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs generally provide the easy diversification, low expense ratios, tax efficiency of index funds, and still maintaining all the features of ordinary stock, such as short selling, options and limit orders. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, which makes them an attractive alternative for individual investors. Because it trades like a stock, an ETF is not calculated based on its net asset value (NAV), once at the end of every day like a mutual fund does. Besides ETF shareholders are entitled to a proportion of the profits like earned interest or dividends paid, and they will not get a residual value in case the fund is liquidated. Investing in ETF To Invest in ETF, one needs to have a demat account and a trading account with an online account for trading stock. Pan card, Identity proof and Address proof are required to open demat and trading account. Once it is ready with the account it’s just a matter of choosing the ETF and place the order online. The orders will be routed to the exchange where the purchase order are matched with the sell orders and executed band a confirmation will be sent back to you. Review of Literature: Kostovetsky (2003) studied relative performance of the ETFs and index mutual funds from the investors’ point of view. The key areas of differences between the two that he found out lie in management fees, taxation efficiency, shareholders transaction fees, and the qualitative factors transaction convenience, short selling, and ability to margin. Mei-Maun Hseu (2007) examined the relative price efficiencies of three American stock market indices (S & P 500, Nasdaq-100 and DJIA) in the spot, futures, E-mini futures and ETF markets for the periods both before and after the NASDAQ market crash between March 2000 and March 2001. The study found that a co-integrating relationship existed between the three indices during the period after the crash. Adjei Frederick (2009) found no significant difference between the performances of the ETFs and the S&P 500 index. He found weak evidence of on both the half-yearly and the yearly horizons in performance persistence. Wong and Shum (2010) examined the performances of 15 worldwide ETFs across bearish and bullish markets over the period 1999 to 2007. They have found out that ETFs always provide higher returns in a bullish market than in a bearish market. They noted that ETF returns are not positive and proportional to the market volatility from the Sharpe ratios. Agapova (2011) has examined the substitutability of two similar investment vehicles: conventional index mutual funds and exchange-traded funds both of which offer a claim on the same underlying index return process but have distinctly different organizational structures. The results show that conventional mutual funds and ETFs are perfect substitutes for one another. Vikrant Kumar and Sougata Ray (2012) made a study on “Gold ETF Performance: A Comparative Analysis of Monthly Returns” revealed that Gold investment has been a very important aspect for ages across the globe. The study also examines the role of gold in hedging equity investment risk." @default.
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- W2267434080 date "2015-05-01" @default.
- W2267434080 modified "2023-09-23" @default.
- W2267434080 title "Analysis of ETFs for Better Investment: Special Evidence from NSE" @default.
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