swagat86 said:
Hi frnds. I just tumbled upon a exchange traded fund. Checked out the charts. It moves exactly in accordance with nifty.
exchange traded fund or ETF are basket of securities like any index and unlike mutual funds they can be freely traded like any security on the bources. they are based on popular indexes and thus it move in accordance with the underlying index.
for example Niftybees (the first ETF in the Indian market) is based on Nifty, while SPICE is based on Sensex. they are a very efficient way of investing particularly for people with little capital.
inspite of being very popular investment vehicle all over the world it is yet to catch on in India. the volumes are too low to trade in, even after more than 4 years of their existence.
cheers,
jdm.
helpful sites:
http://www.benchmarkfunds.com/
http://www.nseindia.com/content/products/prod_etfs.htm