Mutual Funds are professionally managed investment schemes that bring investors together towards common financial goals. It is a familiar term in the investment world and for good reasons like financial management, transparency of investment, and great returns. They are the perfect investment for entry-level investors as risk and reward are balanced.
For investment in mutual funds, an Asset Management Company (AMC) pools investments from a group of investors with similar investment goals. The total amount is then invested in a range of securities like stocks, bonds, money market instruments, commodities, currencies, and more. These investments are managed by professional fund managers who invest and manage funds on your behalf using the latest trends in the market and effective portfolio management.
Similarly, ETFs Exchange-traded Funds (ETF) are passively managed funds that pool resources from different investors to make investments in other securities such as equity, commodities, and currency. They can be used to keep an eye on a collection of assets and ensure proper management of securities. ETFs are generally traded as shares via creation blocks. ETF funds are listed on all major stock exchanges and can be purchased or sold at the equity trading time. Investors can earn dividends based on the fund’s index.
Both Mutual Funds and ETFs have their benefits and the right choice depends on your risk appetite and financial goals. While an ETF is more flexible and can result in higher returns in a short period of time, Mutual Funds are a more stable investment and offers a much wider base for wealth creation.
Mutual Funds and ETFs are often considered complex but with the signature brand of financial expertise and research at Eureka Stock and Share Broking Services Ltd., both can be impressive investments for your portfolio. Additionally, Eureka offers paperless mutual fund and ETF transactions for ease of investment. This is online mutual fund and ETF investment tailored for you.