ETFs - Exchange Traded Funds

[saithilak]

what are ETFs?

I want to know about ETFs. How it is different from a mutual fund or any other security? What is the difference between actively and passively managed ETFs?

Pls shed some light on these questions.

Thanks in advance.

 

[saithilak]

I think, I got an entire thread as reply. That's fine. But I still have few more things to get clarified. What are passive and actively managed ETFs?

Is Gold ETF better than Gold mutual fund like - DSP ML World Gold fund? If yes, how? What about returns in Gold ETFs and Gold mutual funds? Now, everyone betting on Gold (bull) run, is it good time to invest in these avenues.

Pls let me know.

Thanks in advance.

 

[bvpraveen]

I think, I got an entire thread as reply. That's fine. But I still have few more things to get clarified. What are passive and actively managed ETFs?

.....

http://www.investopedia.com/articles/mutualfund/05/activepassive.asp

 

[saithilak]

Thanks bvpraveen.

I got the answer for the differences b/w active and passively managed ETFs.

can anyone answer my other questions:

" Is Gold ETF better than Gold mutual fund like - DSP ML World Gold fund? If yes, how? What about returns in Gold ETFs and Gold mutual funds? Now, everyone betting on Gold (bull) run, is it good time to invest in these avenues."

I am a newbie to the financial jungle. I am learning things on my own. Your help in clarifying the doubts of mine ( sometimes it can be silly), will do a gr8 help to me.

Thanks in advance.

 

[Vicky78]

" Is Gold ETF better than Gold mutual fund like - DSP ML World Gold fund? If yes, how? What about returns in Gold ETFs and Gold mutual funds? Now, everyone betting on Gold (bull) run, is it good time to invest in these avenues."

Gold ETFs invests in commodities namely gold. The navs varies in correspondence to the price of gold traded. DSP ML World Gold Fund on the other hand invests in equities of Gold Mining companies around the world.

 

[friend]

Gold ETFs invests in commodities namely gold. The navs varies in correspondence to the price of gold traded. DSP ML World Gold Fund on the other hand invests in equities of Gold Mining companies around the world.

Hello!
Thanx 4 infor. But some queries remain:
- Is Gold-ETF better than Gold fund?
- How do u place ETFs at risk-radar
- Is DMAT Acc/ Trading Acc necessary for ETF purchase?

friend

 

[Vicky78]

Hello!
Thanx 4 infor. But some queries remain:
- Is Gold-ETF better than Gold fund?

Generally Gold Funds and Gold ETFs are the same. Presently there are no Gold funds. All of them are Gold ETFs.

DSP ML world gold Fund is totally different from Gold ETF as the former's asset is equity while the later's asset is Commodity - gold.

- How do u place ETFs at risk-radar
- Is DMAT Acc/ Trading Acc necessary for ETF purchase?

friend

ETF carry as much risk as other funds, nothing really different.

Yes DMAT Account is required to buy ETFs.

 

[saithilak]

Thanks for the info, Vicky.

One more query - I heard for DSP ML World Gold Fund, the taxes on redemption even after a year of holding. What is the reasoning behind this, while proceeds on other equity funds after a year is not taxable? And also let me know about the taxing on GETFs.

Thanks in advance.

 

[Vicky78]

I am not very clear on the taxes on commodities.

Mr India, can you help?

 

[swama694]

In case of ETF tax depends on whether u r holding the units as investments or stocks in trade

If its investment the same rules for tax implies as in case of equity mutual funds.
Nil long term capital gain tax
15% short term capital gains tax

In case of DSPML World Gold Fund, its treated as FoF investing in funds of gold mining companies.
Here eventhough we are investing in Equities there are no regulation treating debt or equity separately in case of FoF in India. So the tax as of Debt schemes applies.
For long term gain u will get 10% or 20% with indexation which ever is lower.

before Investing thouroughly read offer document. Ofcourse forums give opinion of people but take it as only an information but before investing please go though offer document or atleast KIM of the respective scheme.


Swama