Exchange Traded Fund Exchange Traded Fund - - - - - - An Emerging AvenueAn Emerging Avenue

““You work the first eight hours You work the first eight hours

of each day for survival. Anything of each day for survival. Anything

after that is an investment.”after that is an investment.” ----Thomas ----Thomas

WatsonWatson

ETF- a Hybrid ProductETF- a Hybrid Product ETFs are a mix of a stock and a mutual fund. ETFs are a mix of a stock and a mutual fund.

Like equity shares they are traded on the Like equity shares they are traded on the Stock exchange on real-time basis andStock exchange on real-time basis and

Like ‘mutual funds’ they comprise a set of Like ‘mutual funds’ they comprise a set of specified stocks e.g. an index like Nifty/ specified stocks e.g. an index like Nifty/ Sensex or a commodity (e.g. gold) Sensex or a commodity (e.g. gold)

ETFs came into existence in USA in 1993. The ETFs came into existence in USA in 1993. The first ETFs were based on the S&P 500 and are first ETFs were based on the S&P 500 and are popularly known as SPDRs (Spiders). ETFs popularly known as SPDRs (Spiders). ETFs have gained prominence over the last few have gained prominence over the last few years.years.

Make oodles of money Minimum investment - one unit.

Low distribution costs and administrative charges.

Authorised Participants.

Can be bought/sold anytime during market hours at prices that are expected to be close to actual NAV of the Scheme.

Exchange units with the underlying shares.

Can be used as a tool for gaining instant exposure to the equity markets.

A smart way to take advantage of hot sectors, without having to rely on individual stock picks.

Market PlayersMarket Players in Indiain India

Benchmark's BeES Benchmark's BeES

ICICI Pru Spice ETFICICI Pru Spice ETF

UTI SunderUTI Sunder

Kotak MahindraKotak Mahindra Gold ETFGold ETF. .

ETF’s unpopularity in IndiaETF’s unpopularity in India Lack of understanding of the concept of ETF among Lack of understanding of the concept of ETF among

the investors. the investors.

Generally track an index or industry of stocks, and are Generally track an index or industry of stocks, and are not actively managed like a mutual fund. not actively managed like a mutual fund.

The number of ETF products in the market is less.The number of ETF products in the market is less.

No automatic re-investment of dividends. No automatic re-investment of dividends.

Trading in units may be halted because of market Trading in units may be halted because of market conditions, Market Authorities or Market Regulator. conditions, Market Authorities or Market Regulator.

DD iversifyiversify

OO ptimize trading strategiesptimize trading strategies

II nvestmentnvestment horizon horizon

NN AVAV

VV eryery transparenttransparent

EE fficient market hypothesisfficient market hypothesis

SS ubstantial returnsubstantial returns

TT rading flexibilityrading flexibility