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An inverse ETF (exchange-traded fund) is a type of ETF that rises when the underlying asset prices fall.   Contrarian traders who want to profit from the decrease in the value of an asset generally tend to use such instruments. Contrarian investing is the investment strategy of profiting from trading against the market direction.   For example, if the market is bearish, i.e., falling, the contrarian investor is bullish, i.e., expects growth, and hence will look for buying prospects.  Simply put, when the index 'sees' the ETF 'saws.' illustratively.  Inverse ETFs are similar to short-leveraged ETFs but differ in the gearing ratio. The gearing ratio is the means of measuring financial leverage to equity. Inverse ETFs generally have a gearing ratio of 1, whereas short-leveraged ETFs can have a gearing ratio of 2 or 3.   Short-leveraged ETF is ProShares UltraPro Short QQQ which provides a 3x daily short exposure on Nasdaq 100. Inverse ETF is ProShares Short Russell2000 which provides a 1x daily short on the Russell 2000. The inverse of an ETF is also called a short ETF or a Bear ETF Like short-leveraged instruments, inverse ETFs also hold swaps to achieve their exposure. A short Russell 2000 will hold swaps paying the return to the counterparty. If the index trades up, the fund will pay the return to the counterparty, decreasing the ETF value; otherwise, the index goes down.   The ETF rebalancing needs daily attention to achieve this kind of balance. Inverse ETFs are balanced daily; hence they are best suited as a short-term instrument.   In the long run, the ETF will exactly replicate the index; on the contrary, no guarantee of direction.  The illustration below helps us comprehend this with ease DaysDaily market performanceExpected index levelExpected 1x Inverse ETF levelDaily ETF performance00%100100 1-5%95.00105.005%2-5%90.25110.255%3-5%85.74115.765%4-5%81.45121.555%5-5%77.38127.635%6-5%73.51134.015%7-5%69.83140.715%8-5%66.34147.755%9-5%63.02155.135%10-5%59.87162.895%10-day cumulative change -40.1362.89  There are significant differences between holding an Inverse ETF and short selling. Short selling requires a margin account. The trader borrows these securities to sell at a higher price to other traders, and they can repurchase the asset at lower prices, thus winding up the trade by returning the lent securities.   However, there is a risk of costs rising after a short time in short selling, which exposes the investor to a virtually unlimited upside. When an investor has an inverse ETF, and the underlying exposure is going down, the investor's exposure in ETF is going up, i.e., the ETF NAV moves up, increasing the notional exposure to the position if the overall direction is correct.  Thus, this is precisely the opposite of what happens in short selling. Inverse ETFs allow the investors to short with a maximum loss of the value of the ETF, i.e., the NAV of the ETF. Inverse ETF NAV moves up when the market is going down and converse if the market is falling. Several types of inverse ETFs can be used to profit from declines in the market indices, such as Russell 2000 or Nasdaq 100. Some ETFs are also sector-specific such as energy, banking, FMCG, etc. Some investors use these inverse ETFs to hedge their portfolios against falls.   For instance, if an investor owns an ETF tracking the Nasdaq100, he could hedge his position with an inverse ETF that tracks the Nasdaq100.  However, such hedging can have its own set of risks since one of them is sure to make a loss in your portfolio. While this may appear appealing, losing money is also significant.  Inverse exchange-traded funds aren't for everyone or even most investors. More experienced traders who understand what they're investing in and why are better suited to use them.   Regular ETFs can still provide strong returns, and investors should stick to lower-risk products that can still generate attractive returns. FAQs Are inverse ETFs a good idea? An inverse ETF is a high-risk investment option that may not suit risk-averse investors. This investment vehicle is suitable for highly risk-tolerant investors who are comfortable with the risk that inverse ETFs possess.   Who buys inverse ETFs? Inverse ETFs are for highly risk-tolerant investors. Inverse exchange-traded funds aren’t for everyone or even most investors. More experienced traders who understand what they’re investing in and why they are investing in a particular asset are better suited to use them. What is an example of an inverse ETF?   Several types of inverse ETFs can be used to profit from declines in the market indices, such as Russell 2000 or Nasdaq 100. Some ETFs are also sector-specific such as energy, banking, FMCG, etc. Some investors use these inverse ETFs to hedge their portfolios against falls.    For instance, if an investor owns an ETF tracking the Nasdaq100, they could hedge their position with an inverse ETF that tracks the Nasdaq100.    What does an inverse ETF do?   An inverse ETF (exchange-traded fund) is a type of ETF that rises when the underlying asset prices fall.   Inverse ETFs are similar to short-leveraged ETFs but differ in the gearing ratio. The gearing ratio is the means of measuring financial leverage to equity. Inverse ETFs generally have a gearing ratio of 1, whereas short-leveraged ETFs can have a gearing ratio of 2 or 3.    Short-leveraged ETF is ProShares UltraPro Short QQQ which provides a 3x daily short exposure on the Nasdaq 100.   Inverse ETF is ProShares Short Russell 2000 which provides a 1x daily short on the Russell 2000.   Consult our expert to discuss the right plan for you.  TALK TO AN EXPERT

The key to understanding any concept is the often-neglected details. Thus, knowing the ETF creation and redemption process becomes of paramount importance. This process tells us how exchange-traded funds gain exposure to the market and the secret behind their affordability. Let's have a look at the ETF creation and redemption process ETFs creation process  The process begins with the ETF manager filing a plan with the competent authority.   For instance, the manager will file a project with the Securities and Exchange Commission (SEC) if in the USA or the Securities and Exchange Board of India (SEBI) in India. Once the approvals are in place, the ETF manager, often called a sponsor, agrees with the Authorized Party (AP). In some cases, the sponsor and the AP are the same entity.  Step 1:  The creation of exchange-traded funds starts with a party called an Authorized Participant (AP). An Authorized Participant can be a professional, financial institution, market maker, or a person with tons of money Step 2:  Now, it is the job of this Authorized Participant to get hold of all the assets or securities that the ETF wants to hold.  For instance, if the ETF tracks the Sensex, the Authorized Participant buys some quantity of all the constituent shares of the Sensex. Similarly, if the ETF tracks the Dow Jones Industrial Average, the AP will buy some shares of all the 30 companies that are a part of the index.  Step 3:  After that, the Authorized Participant will then deliver these to the Exchange Traded Fund. The Authorized Participant will get a block of ETF shares of equal value as payment for his services.   Usually, a block consists of 50,000 shares. The swap is a one-on-one fair value based on the NAV of the ETF share and not the market value. Both benefit from this transaction; the AP gets the ETF shares that he can resell for profit, and the ETF provider gets the stocks it needs to track.  Step 4:  The ETF shares received by the AP are listed in the secondary market and traded just like standard stocks.   ETFs redemption process  The redemption process can be associated with two people  The Authorized Participant  Retail investor. For the Authorized Participant, it will be as under:  Step 1:  The Authorized Participant buys the shares trading on the stock market.  Step 2:   The Authorized Participant will deliver the shares to the fund.  Step 3:  The ETF will give the underlying securities back to the Authorized Participant.  Step 4:  The Authorized Participant will then sell these securities in the stock market.  An investor can sell off his Exchange Traded Fund in two ways-  Sell openly in the stock market, the most chosen one.  Gather enough ETF shares to make a creation unit (mostly 50,000 units) and sell it back to the fund. Generally, only Institutional investors have this option open due to its higher costs. When the fund gets this creation unit, it is destroyed, and the underlying security goes back to the redeemer.   The study of this creation and redemption is crucial because it keeps the share price of the ETF near its underlying NAV, i.e., the Net Asset Value. Net Asset Value represents the fund's per share/unit price on a specific date or time.   For instance, if the ETF price falls below the NAV, the AP will interfere in the open market and buy up the ETF shares, raising its price and bringing it back to the level of its NAV. Similarly, if the ETF price increases well above its NAV, the AP will intervene and buy the underlying securities and sell off new ETF shares - bringing the price of the ETF shares back to its NAV value.  This arbitrage process is not perfect, but it helps contain the volatility of the ETF share price quite effectively. FAQs How is an ETF created?  Ans. When an ETF is created, a financial organization known as a sponsor purchases a selection of equities to represent the ETF's holdings. The sponsor issues ETF shares that reflect the value of the holding's portfolio once these shares are placed in a trust.  What is an example of ETF creation redemption?  Ans. The AP could sell the shares it was given when the ETF was created and earn a spread between the cost of the assets it purchased for the ETF issuer and the selling price from the ETF shares if the ETF is in high demand and trades at a premium.  What is the creation redemption process of ETFs and the function of authorized participants?  Ans. ETF shares are created through a process known as creation and redemption, which takes place in the primary market at the fund level. It permits authorized participants (APs), like licensed market makers, to trade a predetermined basket of securities, including cash, for a specific number of ETF shares.  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Many students seek out other nations to complete their medical degrees, especially in Europe. The cost of studying medicine in Europe is surprisingly more reasonable than in India. Many private universities in India charge nearly 40 to 50 lakhs per annum for a medical degree. In comparison to this, several European nations with their inexpensive medical education have emerged as promising choices for these students.  European institutions are a popular choice among students due to their cutting-edge facilities and academically outstanding professors. In this blog, we've discussed the cost of studying medicine in Europe. Cost of studying medicine in Europe One of the biggest benefits of studying MBBS in Europe is the ability to save money with European medical education while still receiving an excellent education. The approximate cost of an MBBS in Europe in Indian rupees is as follows. UniversityFees/YearEuropean University5000 USD (INR 3.7 lakhs)Lviv National Medical University4900 USD (INR 3.6 lakhs)Ivane Javakhishvili Tbilisi Medical University6000 USD (INR 4.4 lakhs)Taras Shevchenko National University6000 USD (INR 4.4 lakhs)Bogomolets National Medical University5500 USD (INR 4.07 lakhs)Gdansk Medical University12,000 USD (INR 8.8 lakhs) Now, when it comes to living expenses while studying in Europe, they might change depending on the nation you have selected as well as the place where you will be residing. Following is the average cost of living in Europe. CountryAverage Living Costs to Study in Europe (Per year)Belgium10,200 -11,400 EUR (8.56 - 9.57 lakhs INR approx.)Netherlands9,600 -13,200 EUR (8.6 - 11.8 lakhs INR approx.)Austria11,400 EUR (9.57 lakhs INR approx.)Denmark14,400 EUR (12.9 lakhs INR approx.)Ireland12,000 EUR (10.7 lakhs INR approx.)Finland9,600 EUR (8,6 lakhs INR approx.)France9,900 EUR (8.3 lakhs INR approx.)Germany10,200 EUR (8.56 lakhs INR approx.)UK12,180 EUR (10.22 lakhs INR approx.)SwitzerlandCHF 22,734 (18.02 lakhs INR approx.)NorwayNOK 139,680 (10.78 lakhs INR approx.)Spain10,800 - 13,200 EUR (9.05 - 11.07 lakhs INR approx.)RussiaRUB 242,160 (2.51 lakhs INR approx.)SwedenSEK 96,000 (99,600 INR approx.)Note: The given figures are projections and can be reduced or increased by the universities and countries. Please always cross-check with the official websites at the time of admission. Top courses offered by European medical universities The top programs provided by European medical colleges are listed below. CoursesDurationMBBS/ MD6 yearsDentistry5 yearsPharmacy4 yearsNursing4 years Eligibility criteria for studying medicine in Europe The fundamental qualifying requirements for studying medicine in Europe vary depending on the program; we have listed the basic eligibility criteria for studying medicine in Europe below: You must be at least 17 years old on December 31 of the admittance year or older. The 10+2 standard test must be passed with a scientific degree. You must have Physics, Chemistry, Biology, and English as subjects in 12th grade. Additionally, you must receive at least a 50% on your 12th-grade exam. In order to apply for MBBS in Europe, you must pass the NEET test. At the time of admission, all original documentation must be shown. Top Universities to study medicine in Europe  If you want to enroll in one of the next intakes, these are the top universities in Europe for medical studies: Ivane Javakhishvili Tbilisi Medical University European University Taras Shevchenko National University Bogomolets National Medical University Lviv National Medical University Gdansk Medical University Different investment options to fund your child's cost of studying medicine in Europe There are several investment opportunities to help pay for your child's medical studies in Europe. Fixed deposits and other traditional products might not be enough to cover your child's educational costs. It is crucial to take other products into account, such as shares, balanced funds, and equity funds. You can select one of the following investment techniques based on your time frame: If your child will want the money within five years, debt mutual funds are the best choice. Such funds have the ability to produce returns that are higher than the rate of inflation while also supplying liquidity. For long-term objectives, you can combine several financial instruments. Gold, equities, and debt are all investment options available to you. Buying stocks gives investors the chance to eventually generate more money, even if exposure to the stock market may be dangerous. One of the best investment alternatives for supporting a child's education is the PPF. To amass significant wealth, you must begin this early and invest consistently. A variety of Child-focused services are offered by several insurance companies. When your kid needs the money to pay for higher schooling, you could opt to set more responsible regulations in place. Children's investment plans can assist you in preparing financially for rising education costs, unexpected illnesses, and unfortunate circumstances. As soon as you can, you should start making plans for your child's future. By doing this, the associated risks are dispersed and your assets have more time to grow. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Studying abroad can be a life-changing experience, but it can also be expensive. The cost of tuition, accommodation, travel, and other expenses can add up quickly, making it difficult for many students to make the most of this opportunity. Fortunately, there are abroad education loans that can help you finance your study abroad program or gap year. However, you have to understand that these loans are typically designed to support students who are pursuing a degree program, not those who are taking a gap year or participating in a study abroad program. So, if you're looking to use an abroad education loan to fund a non-degree program, you'll need to take a different approach. https://www.youtube.com/watch?v=4gTQkdePOWM The first step in securing an abroad education loan for a study abroad program or gap year is to research your options. Start by exploring different loan programs offered by private lenders, such as banks, credit unions, and online lenders. You may also be able to find scholarships and grants specifically for study abroad programs, so be sure to check with the host institution, study abroad organization, or government agency for information about funding opportunities. Once you have a list of potential loan programs, it's essential to compare their terms and conditions. Look at the interest rate, repayment terms, and any other fees or charges associated with the loan. Make sure you understand what the loan will cost in the long run, so you can make an informed decision. You should also consider any restrictions on how you can use the loan proceeds, such as restrictions on the type of program you can attend or the length of time you can spend abroad. When applying for an abroad education loan, you'll typically need to provide some basic information about yourself, including your name, date of birth, and contact information. You may also need to provide proof of your enrollment in a study abroad program or gap year program, such as a letter of acceptance or a letter from the host institution. You may also be asked to provide financial information, such as your income, expenses, and assets, to help the lender determine your ability to repay the loan. If you're approved for an abroad education loan, it's important to use the funds wisely. Make sure you use the loan proceeds to cover your necessary expenses, such as tuition, travel, and housing. Avoid using the loan for frivolous expenses, such as shopping or dining out, as these expenses can add up quickly and make it more difficult for you to repay the loan. When it comes to repaying your abroad education loan, you have to be proactive. Review your loan agreement carefully to understand your obligations, including the monthly payment amount and the due date. Make sure you have a budget in place that includes the loan payments, so you can stay on track and avoid falling behind. You may also want to consider setting up automatic payments so you never miss a payment. If you're having trouble repaying your abroad education loan, reach out to your lender as soon as possible. They may be able to work with you to find a solution, such as reducing your monthly payment or extending the repayment term. However, keep in mind that taking these steps can increase the overall cost of your loan, so always consider all of your options carefully. Tips for using education loans to fund your study abroad program or gap year Here are a few tips to help you make the most of your education loan and make your study abroad experience a success: 1. Plan ahead Start planning and researching your options as soon as possible to give yourself enough time to find the best loan for your needs and to get your application processed. 2. Be mindful of your budget Make a budget for your study abroad program or gap year and stick to it. This will help you avoid taking out more loans than you need and minimize the amount you need to repay later. 3. Consider a co-signer Some lenders ask you to provide a co-signer for the eligibility of the loan in case you are not qualified for it or there are some discrepancies. Conclusion  In conclusion, abroad education loans can be a valuable resource for students who are looking to fund a study abroad program or gap year. However, the cost of such programs can be a significant barrier for many students. Fortunately, there are education loans available to help you fund your study abroad program or gap year. Be sure to research your options, compare the terms and conditions of different loan programs, and use the funds wisely to make the most of it. In case you need more information or advice, EduFund’s team of financial advisors is always available for help. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Education loans for MBAs in India can be easily found but applying for them is harder than you think. The process is rigorous and time-consuming. Here is everything you need to know about education loans for MBAs in India before you start preparing for your application.   Want help with your loan application? Click here to connect with our experts and apply for loans with multiple banks with one application!  Why an MBA education loan? MBA is considered one of the most expensive and career-altering courses in the world, it can cost you anywhere between 10 to 40 lakhs! Many students opt for an education loan for this program. This is because an education loan is the easiest and most efficient way to finance your MBA program without any added financial stress. It allows you to complete your education and start paying for the loan after the course is over. The interest rates are reasonably designed to help students and professionals pay off their loans over a period of time. Advantages of taking loans for college  Boost your pocket: An MBA school loan can make it possible for you to complete a degree that you otherwise might not have been able to afford.  Don’t miss opportunities: Without taking out a student loan, many students would be unable to pay the MBA course cost. It is a crucial investment that can boost your professional standing and open up new development prospects for you.  Nearly all of the expenses you'll pay while completing an MBA will be covered by your student loan, which offers almost 100% coverage.  Affordability: An MBA program might cost thousands of rupees. At IIMs, tuition prices range from INR 13 lakhs to INR 23 lakhs. The leading business schools charge between INR 10 lakh and INR 20 lakh in tuition. The cost of the student's personal expenses, project costs, and dorm fees should also be included. Therefore, if you want to feel confident and at peace, while enrolled, paying for an MBA program is just as important as being admitted. Alternative methods of Achieving Dreams  A spot in one of the best MBA colleges in India requires funding the program, which is a difficult task given the high cost of the curriculum. Therefore, whether an MBA is given in India or abroad, managing the program's funding through educational loans is the most common and effective option. List of National Banks that Provide MBA Education Loans  MBA education loans are available from a number of major banking organizations at competitive interest rates. Below are a few of the most important student loan programs offered by various financial organizations that can assist you in paying for your MBA programs:  State Bank of India  Canara Bank  Dena Bank   Punjab National Bank   Union Bank of India   Central Bank of India List of private banks and NBFCs providing loans for MBA education  In addition to the above-mentioned public institutions, one should look at what private banks and NBFCs have to offer. the following have been mentioned:  ICICI Bank   Axis Bank   Kotak Mahindra Bank  Charges paid for by Education Loan  Education loans help you cover a variety of expenses. From lab fees to tuition fees, they can help you cover financial woes easily. However, these loans only cover educational costs and are not for personal use. Some of the expenses paid for by the education loan are:  Fees due to the hostel and the college  Examinee costs  Library fees  Laboratory costs  Traveling costs (if pursuing MBA abroad)  If applicable, the student's insurance premium  Buying a laptop (if required for the course)  Other costs, such as travel for research, project work, or a thesis  Acquisition of books, tools, and instruments  Building fund, refundable deposit, and caution deposit  If you want to know how much loan you need to take and your eligibility, check it out here.  Documents needed to apply for an MBA Education Loan  Address and age verification if you do not already have a bank account  copies of the qualifying exam score reports (CAT, GMAT, IELTS, TOEFL, and others)  A schedule of the course's costs (course prospectus where the course fee is mentioned)  Statement of the borrower's or co-bank borrower's account for the previous six months  Income tax assessment orders for students or parents that are no older than two years  A concise list of the borrower's assets and liabilities  Copy of a passport Loan application in bank format  Evidence of enrollment in the course (in India or abroad)  Passport-sized pictures  Don’t let finances stop you from achieving your dreams, get an education loan to pay for your college with us!

Everyone wants a slice of the American Dream and with globalization, benefiting from the world's largest economy is no longer just a dream. Now Indians are investing in US markets from the comfort of their homes yet there are some common mistakes to avoid when investing in the US stock market that you should know before entering! The US stock market offers significant opportunities for investors worldwide, from selected securities to exchange-traded funds across a variety of indices and themes.  However, before you invest in US equities, you need to know how to prevent the following US stock investing blunders. While some will be similar to stock market investing blunders to avoid if you're a newbie, others will be exclusive to supporting in the United States.   Ten mistakes to avoid when investing in the US stock market  1. Holding only equities  While it is natural to desire to invest in a few of the world's most well-known companies, focusing solely on choosing specific equities is one of the most common mistakes to make when investing in the United States.  Your investing strategy should be customized to your risk tolerance and include a nice blend of equities and exchange-traded funds (ETFs). If you're new to the stock market in the United States, you should begin with an ETF-only strategy.  2. Lack of investment goals  A lack of adequate investment goals is among the most prevalent blunders when investing in global stock markets. You must carefully craft your investment goals and use the most suitable financial tools to attain them.  3. Going with the trend, don't  Please do not purchase a stock simply because it has come up in the press or because you believe you have already lost money due to a company's surge and therefore cannot afford to lose any more. Remember, you're investing in a company, not a stock.  4. Timing the market  Another classic stock-trading gaffe is attempting to time the market. It's difficult to gauge the demand, and experienced investors frequently make mistakes.   According to an American Pension Fund Returns study, correct asset allocation accounts for roughly 94 percent of portfolio returns, not market timing or individual stock selection.  5. Ignoring tax liabilities  Keep in mind this flowchart  6. Not knowing forex rates  The exchange rate is essential when depositing Indian cash into your US brokerage account. Your bank will also charge you a foreign exchange conversion fee.   As a result, it's best to go with a platform that has partnered with banks to offer better exchange rates and a reduced markup cost.  7. Violating LRS regulations  The LRS regulates how much money an Indian person can send abroad and for what purposes. An Indian cannot use margin to invest internationally, in speculative products, or trade-in FX pairs under the LRS.  8. Asset class allocation   The secret to a good investment portfolio is asset allocation. On the other hand, investors make the typical mistake of focusing on individual equities rather than doing adequate asset allocation.  9. Over diversification   When used correctly, diversification is an excellent risk management technique. When assets have various risk profiles and little correlation, it add value.   Over-diversifying, on the other hand, can be counterproductive. Adding US equities ETFs to a diverse US stock portfolio, for example, may well not make sense.  10. Being impatient  Long-term investing requires only 1% action and 99 percent patience. On the other hand, many investors lack patience and wind up constantly fiddling with their portfolios.   To maintain a disciplined attitude, you must look past short-term volatility and concerns and focus on the market's long-term growth potential.  Morgan Housel, in his book “The Psychology of Money”, modifies a quote from the great Napoleon while talking about investing:   "A good definition of an investing genius is the man or woman who can do the average thing when all those around are going crazy."  Keep the above mistakes and the quote in mind if you want to get the most out of your investment in the United States. FAQs What are some common mistakes to avoid when investing in the US stock market? Here are some common mistakes to avoid when investing in the US stock market: Lack of investment goals and a time horizon Blindly following trends and investing randomly Violating LRS regulations and not consulting your CA in terms of taxes Over diversification and investing in multiple stocks Being impatient and over-monitoring the markets What are 5 mistakes investors make? The most common mistakes that investors make are: An attempt to time the market and wait for the right time to invest, Try active trading Misunderstanding financial markers and performance details, Working alone or choosing the wrong investment advisor Not attempting to understand the tax dynamics and liabilities What is the golden rule of investing? The golden rule of investing is greater the risk, the greater the returns! A bonus rule is always to consult your financial advisor before investing your money in any scheme. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT

Do you intend to study abroad and are an Indian student? There are many financial avenues to achieve this goal. Here are 7 Indian scholarships that help Indian students turn their dream of studying abroad into a reality.  Indian government provides financial aid to Indian students who want to pursue their aspirations of studying abroad. Some well-known Indian government scholarships for studying abroad are given below. Let's start!  1. Fullbright-Nehru master’s scholarships  The Fulbright- Nehru Master’s Fellowships can be claimed by talented and determined Indian scholars with applicable work experience. These scholars need to display significant rates of leadership, in addition to work experience and academic qualifications.  It's a merit-grounded and need-grounded program offered by the United States- India Educational Foundation. Please note that the quantum is variable and can be renewed yearly.  Coverage of accident and sickness costs as per the United States government guidelines. also, this education also funds the round-trip frugality class chow.  scholars who have completed a degree fellow to the United States bachelorette’s degree are eligible to admit this education. This includes the completion of a four-time bachelorette’s program, master’s program, or postgraduate parchment. 2. Great Wall Program  Learn about The Great Wall Program if you're interested in pursuing higher education in China. You can achieve it with the help of this scholarship.  You should be aware of a few things regarding this government scholarship for studying abroad. Among them are:  First, this scholarship will cover the cost of tuition, a regular stipend, health insurance, and housing.  Second, applicants for this scholarship must be under 45 years old and have a bachelor's, master's, or comparable degree.  Last but not least, UNESCO created this government scholarship program for academics and students looking for financial support to study and conduct research in China. 3. The JN Tata Endowment Scholarship  If you want to pursue a degree at a global university, you are eligible for this government award for students.  Depending on whether the student meets the eligibility requirements, the scholarship amount may range from INR 1,000,000 to INR 10,000,000.  A gift scholarship worth INR 75,000 can also be suggested for students. Based on the student's academic standing at their university, gift scholarships may be given. However, you must pay back the scholarship money in equal payments of 20%. Repayment can start if you're a resident between both the third and seventh years of your stay. You will have to start paying back the government scholarship money if you start working before your third year.  4. Aga Khan Foundation International Scholarship Program  Students have a wonderful opportunity to study at institutions in Portugal, France, the United Kingdom, Canada, and the United States thanks to the Aga Khan Foundation Scholarships. As a result, it is among the most sought-after government scholarships offered by India for international study.   Even so, when applying for this govt full scholarship overseas, there are some points to bear in mind. Students who apply for this award will receive a 50/50 loan and grant. Most applicants for the master's programs are given preference. However, you might need to look into other scholarship options for short-term programs like certifications and postgraduate degrees.  The demonstration of continuous intellectual effort and achievement is one of the qualifying criteria for this scholarship program.  5. Lady Meherbai D Tata Education Trust Scholarship  The Lady Meherbai D Tata Education Trust Scholarship stands out since it is designed exclusively for Indian women. Students now have a great chance to continue their academic education at an academic institution abroad.  If you're planning to qualify for this scholarship, read the following information. This scholarship can be used for Masters-level courses in places including the United States, the United Kingdom, and Europe.  You should have at least two years of professional experience in your chosen industry.  Proof of financial status is another crucial document needed to be eligible for this government scholarship FAQs How can an Indian student get a scholarship to study abroad? There are many ways to get a scholarship to study abroad. One of the most common is academic excellence, Many scholarships have eligibility criteria where they evaluate students based on merit and check their overall academic performance before selecting them. The most common selection parameters are 12th board exam results, IELTS/TOEFL scores, extracurriculars, SOP, and LORs submitted by the candidates. Interviews play an important role in the selection process. How can I get a 100% scholarship to study abroad? To win a 100% scholarship to study abroad you need an excellent academic history and an overall high-caliber resume. Many scholarships like Fulbright or Rhodes offer 100% scholarships, you can apply for them and get your ticket to your dream school. Which scholarship is best for Indian students to study abroad? There are many scholarships for Indian students to study abroad such as: Fullbright-Nehru master’s scholarships Great Wall Program The JN Tata Endowment Scholarship Aga Khan Foundation International Scholarship Program Lady Meherbai D Tata Education Trust Scholarship Consult an expert advisor to get the right plan TALK TO AN EXPERT

You already saw the difference between exchange-traded funds and Mutual funds. Now, let us focus on the difference between ETFs and stocks. Investors have many choices to invest in to grow their wealth in today's day and age. The list is virtually unending when investing in stocks, bonds, mutual funds, ETFs, etc.   Investors want to see investments grow; thus, each has many advantages and disadvantages.  Retail investors can choose from stocks and ETFs. Both are available for trading on the stock market. The stock offers ownership in a single firm; an ETF gives you a basket of securities depending upon the type of ETF. Thus, ETFs provide access to virtually any part of the financial market. ETFs are collections of stocks, bonds, commodity derivatives, and other investments traded on an exchange. Source: Freepik What is the similarity between ETFs and Stocks?   ETFs and stocks are taxable upon redemption. Both offer a steady income.  After applicable tax deductions, some stocks pay dividends to the investors' accounts. Similarly, the assets underlying the ETFs also generate dividends and returns, either invested back into the fund or given back to the investors after proper deductions. There are various sectors to choose stocks and ETFs from. Similar to stocks, ETFs can also be traded on the stock exchange. Difference between ETF and Stock? ETFs are a group of securities packaged as a unit and listed on the exchange. These assets need not be only stocks but can be any security.  Fund managers who own the underlying securities manage these ETFs. The concerned investors of the ETFs do not own the underlying assets directly and hence give no ownership and voting rights. Stocks listed on the exchange offer ownership and voting rights (if they are not preferencing shares) in a single company. Preference shares are the shares that give the investor a promised return at the cost of forgoing voting rights in the AGMs.  ETFs are managed by a professional, thus saving you the trouble of deciding which securities in the underlying assets of the ETF to sell or hold. In the case of stocks, investors need to be very vigilant in the market to know when to buy, sell, or hold.   In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly.   In stocks, the risk attached is higher as the stock price depends entirely upon the company's performance and other exogenous (outside the control of the person in question) factors of the world.  The liquidity of a stock is way higher than the liquidity of an Exchange Traded Fund. However, in rare cases, the latter can have higher liquidity than the former. FAQs Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world.    Are ETFs good for beginners? ETFs are generally suitable for beginners as they are inexpensive compared to a few other investment tools. ETFs have a diversified asset profile, reducing the risk associated with the investment significantly.    Which is safe, ETF or stocks? ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous (outside the control of the person in question) factors of the world. The liquidity of a stock is way higher than the liquidity of an Exchange Traded Fund. However, in rare cases, the latter can have higher liquidity than the former. Have ETFs considered stocks? ETFs are a group of securities packaged as a unit and listed on the exchange. These assets need not be only stocks but can be any security. Fund managers who own the underlying securities manage these ETFs. What is a disadvantage of an ETF? ETFs attract fees and, like any other investment, carry an element of risk. An investor should conduct proper research before making an investment.   Should I put all my savings into ETF?   It is extremely dangerous to put all your savings into one asset class. As the popular saying goes, ‘Don’t put all your eggs in one basket,’ investors should look to diversify their portfolios.  Is it good to do SIP in ETF?   While investing in ETF, you can invest via SIP or lump sum. Investing through SIP offers investors many benefits. It helps investors stay committed to the goal for a long period and helps them invest regularly.   Is ETF better than a mutual fund?   ETFs and mutual funds are two different investment vehicles for investors. ETFs are both actively and passively managed, but most are passively managed. Most mutual funds are actively managed by fund managers. An investor needs to understand what an investment vehicle offers and how it can help them reach their goal. There’s no right answer to this question, as it differs based on an individual’s financial goals.   Conclusion that every investment decision should be backed by the study of the risks involved.  The investor should keep his risk profile in mind before proceeding.   Most importantly, the strategies and goals of the investor are vital when choosing securities. The right for one might not be the right choice for the other.   Keeping these fundamental similarities and differences in mind helps in better decision-making. Consult our expert advisor to get the right plan for you. TALK TO AN EXPERT

The abroad education loan process can prove tricky if you are not aware of the intricate details about the steps involved in the procedure, for example, how to apply, the documents that need to be submitted, and the time to get the loan process approved.  Education loans are one of the common sources of funding education abroad in recent times. As education inflation is reaching new heights and education costs are rising day by day, one can consider applying for education loans to support their already existing savings. An overview of the abroad education loan process Each year thousands of students apply for an abroad education loan as they want to pursue further studies at top universities of the world. The biggest challenge is arranging funds through education loans, as the cost of studying and living abroad is very high.  Students in India can apply for secured education loans from government banks, private banks, PSU banks, and unsecured loans from non-banking financial corporations. Students also have the option of getting education loans from foreign banks that offer loans to non-native students for global education. How to apply for an abroad education loan process? Fill out the online application form provided by the bank that you have shortlisted for the education loan. Visit the bank and confirm all the documents that will be needed by the bank for forwarding the loan process further. Gather all the required documents in a file and submit them to the proper authority in the bank. Enquire about the lawyer and valuator and get the legal opinion and valuation report from the lawyer and valuator, respectively, which will be later submitted to the bank by the valuator. The complete documents are then sent to the loan processing cell, and the processing officers go through the submitted documents and verify the loan application. The bank then sanctions the loan, and the loan applicant will have to visit the bank and sign all the necessary documents.  Post visa approval, applicants will have to revisit the bank and complete the property mortgage process if any property has been mortgaged against the loan.  Funds are disbursed after signing a disbursement agreement.  Applying for an abroad education loan through the Edufund app is simple. Submit all the documents and the loan application form once you have received the offer letter from a university. As soon as you clear the eligibility criteria, the loan gets approved, and you can sign the loan agreement. Documents required for applying for abroad education loan process The financial institution where you have applied for the abroad loan application will require details of the applicant and the co-applicant.   Properly-filled application form. Documents confirming identity details and residence proof of the applicant and co-applicant. It can be a passport, voter ID, pan card, driving license, or Aadhar card that would show personal details and current address. Passport-size photographs of both the applicant and the co-applicant Academic documents of the applicant that depicts the total academic and professional experience.  This includes mark sheets and certificates of class – 12, graduation, and the results of the admission test that the applicant has taken, like SAT, TOEFL, LSAT, GMAT, IELTS, or GRE.  The acceptance letter that the applicant has received from the university is the admission proof for studying abroad. Last six months' bank statements of the applicant and the co-applicant. Income proof of the co-applicant that shows that they are capable of fulfilling the terms of loan payment in case the applicant is unable to do so. In the case of collateral, the property title deed, building approved plan and NOC for a mortgage from the builder is needed.  Time required to get the loan process approved It takes nearly 45 days to 2 months to start the processing for the submitted loan application. Edufund has tied up with several top banks in the country and can process the loan in comparatively fewer days. The experts associated with the app will negotiate on your behalf and get the best possible offer on loan rates.  Conclusions  Students who are aware of the various steps involved in the abroad education loan process can plan, prepare and take full advantage of the knowledge so that the application process for the loan procedure is smooth, fast, and quick.  Take the help of the experts on the Edufund app to choose the best possible education loans with top banks. Qualified counselors will help to make the process smooth and easy and ensure that the education loan is available on time at the best possible rates. There are no hidden costs and zero commission, which will help to save on unnecessary fees.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

Education has become very expensive in India. SIP plans for child education are the solution! Statistics show that educational inflation is around 11% in the country today, and the cost of education is expected to soar in the future. A report by the National Sample Survey Office (NSSO) during the period of 2008-14 stated that the annual cost of education burgeoned by 2.75 times when compared to 2008, whereas the per-capita income had only increased by 2.49 times, indicating the mismatch in the income growth and the increase in the cost of education. High tuition fees coupled with the difficulty of paying bills and staying independent cause highly qualified and bright minds to even refrain from applying to colleges. Tuition rates are increasing all over the world and are rising faster than the growth in per capita income. Looking at these expenses from an exchange rate perspective, rupee owners will always have a disadvantage in terms of the cost of overseas education due to our country’s current account balance, relative interest rates, and inflation which cause a weakening of the Rupee. In the near future, the trend would continue hence ballooning the fees even further. Investing is a mantra that can be followed to rise above the tide of this soaring educational inflation. A wealthy corpus is accumulated and the effects are more prominent when the investor starts saving at an earlier stage owing to the compounding effect. What is SIP?  SIP is a Systematic Investment Plan. It is a facility offered by mutual funds to investors to invest in a fund properly. With a SIP facility, investors can invest a fixed amount of money in pre-defined intervals.  SIP is the perfect method of investment for newcomers and risk-averse investors – it allows you to participate in the market without timing it or worrying about its highs & lows.   Note that the fixed amount of money can be as low as INR 500. The SIP route to investment is necessary as it helps you to invest in a time-bound manner. There is no need to worry about market dynamics when you are investing via SIPs.  Calculate Investment using SIP Calculator Reason to invest in Mutual Fund Scheme for child education 1. Reduce the financial burden This forms a habit of investment discipline by debiting a fixed amount from your bank account at every periodic interval. This also prevents a lump sum or a sudden outflow of money from your pocket, hence maintaining financial stability. 2. Start investing in small amounts Most SIPs start at a minimal amount of Rs 500, which enables the investors to save for their child’s future – one penny at a time. 3. Rupee cost averaging By investing through SIP, one can also benefit from rupee cost averaging – where the cost of purchasing a unit of the fund is averaged over the time horizon thus protecting its investors from volatile market conditions and price fluctuations. 4. Compounding effect Investors also benefit from the compounding of returns, where the returns earned on the invested capital are re-invested into the fund. Best SIP Mutual Funds Read More 5 Benefits of SIP Plans for Child Education   1. Compounding can help you become financially stable  SIP helps everyone make the best of their savings and lets one make the most of compounding. Compounding is when the initial interest earned on your investment starts earning interest over the years. It helps people with small sums of money generate a sizeable amount over the years. Compounding is a great way to meet your financial goals and retire with a healthy sum of money in your pocket.   2. Make the most of rupee cost averaging  Staying invested for long and consistently have its benefits. This benefit is called rupee cost averaging when your overall investment is protected from market fluctuations.   3. A common’s man way of investing  SIP is a method that is suitable for every investor. Whether you are a seasoned or a new investor, you can start a SIP and invest in funds that can help you with your financial goals. It is a common’s way of ensuring their future and helps them invest small sums of money.   4. SIP can help you stay financially disciplined  SIP makes investing easier and affordable for everyone. It is an EMI for your future funds and helps you consistently contribute to it. You can set up an auto-debit from your account so that you continue to invest. SIPs can be paused and even stopped based on your needs. It is a great way to contribute towards your financial goals without worrying yourself out.  5. SIP can be as little as Rs. 100  You can start a SIP for Rs. 100 or even Rs. 500. The choice is yours! Based on your needs and financial goals, your investment can be as little or as big as you want. You can gradually increase your SIP investments. Some mutual funds offer a Step-up option above a certain investment amount which means that as your salary grows, you can increase your investments as well.   How does the SIP calculator work? Read More Tax benefits of Mutual Fund Scheme for a child's future There are certain benefits when you invest via SIP. Starting a SIP in a tax saving like ELSS. This tax-saving fund has certain tax benefits. It also has a lock-in period of three years.   SIP plans in an ELSS fund from April to March (financial year) are eligible for Section 80C benefits for that fiscal year up to Rs.1.50 lakhs.  Top 10 SIP plans (mutual fund scheme) for child education Scheme Name1-Yr ReturnAUMProsConsAditya Birla Sun Life Frontline Equity FundExpense Ratio: 1.08%Min SIP Amount: Rs 10014.85% Rs 18,897.76 CrLower expense ratioAssets Under Management (AUM) of the fund are greater than Rs 15,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. The investors should monitor the performanceAxis Long Term Equity Fund Expense Ratio:0.72%Min SIP Amount: Rs 50014.85% Rs 28,556.83 CrFund has higher 3-year and 5-year returns as compared to the category average.ELSS fund – Tax haven for 80CAssets Under Management (AUM) of the fund are greater than Rs 20,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. Investors should monitor their performance.Parag Parikh Flexi Cap FundExpense Ratio: 0.96%Min SIP Amount: Rs 100021.11%Rs 8,701.65 CrFund has higher 1-year, 3 years, and 5-year returns as compared to the category average.Low expense ratio.NoneSBI Equity Hybrid FundExpense Ratio: 0.97%Min SIP Amount: Rs 50012.20%Rs 38,080.12 CrFund has higher 1year, 3-year, and 5-year returns as compared to the category average.Low expense ratio.Assets Under Management (AUM) of the fund is greater than Rs 20,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. Investors should monitor their performance.SBI Focused Equity FundExpense Ratio: 0.97%Min SIP Amount: Rs 50013.08%Rs 14,533.37 CrFund has higher 3-year 5 year and 10-year returns as compared to the category average.The fund has been in the market for over 10 years.High expense ratioAxis Bluechip FundExpense Ratio: 0.55%Min SIP Amount: Rs 500Rs 25,134.85 CrFund has higher 1-year 3-year and 5-year returns as compared to the category average.The expense ratio is on the lower end and the fund has no lock-in period.Assets Under Management (AUM) of the fund are greater than Rs 20,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. Investors should monitor their performance.L&T Midcap FundExpense Ratio: 0.77%Min SIP Amount:Rs 50067.18% ( 3 year = 7.25%)Rs 6,258.04 CrFund has higher 5-year returns as compared to the category average.The expense ratio is on the lower end.Assets Under Management (AUM) of the fund are greater than Rs 5,000 Cr.When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. Investors should monitor the performance.HDFC Mid-Cap Opportunities FundExpense Ratio: 1.04%Min SIP Amount: Rs 50075.85% ( 3 year = 7.94%)Rs 25,779 CrFund has higher 5-year returns as compared to the category average.The expense ratio is on the lower endAssets Under Management (AUM) of the fund are greater than Rs 5,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. Investors should monitor their performance. Axis Small Cap FundExpense Ratio: 0.38% Min SIP Amount: Rs 50074.30% (3 year = 17.37%)Rs 4,724.14 CrFund has higher 3-year and 5-year returns as compared to the category average.The expense ratio is on the lower endNoneHDFC Small Cap FundExpense Ratio: 0.95%Min SIP Amount: Rs 50094.91% (3 year = 5.88%)Rs 10,024.44 CrFund has higher 3-year and 5-year returns as compared to the category average.The expense ratio is on the lower end.Assets Under Management (AUM) of the fund are greater than Rs 5,000 Cr. When a fund crosses a certain AUM threshold, the returns from the fund tend to decrease or stagnate. Investors should monitor their performance. Mistakes to avoid while investing in SIP plans  Here are some SIP plan mistakes that you should avoid as a new investor:  1. Investing in the wrong fund The most basic mistake in picking SIP plans is to invest in the wrong fund. This usually occurs when an investor is new and invests based on a friend’s advice or hearsay. It's important to do your own research, find out the fund house's previous performance, and the companies listed in the fund, and study its overall progress before starting any SIP plans. It's best to consult a professional before starting on this journey.    2. Investing a huge amount Many investors start strong but end up regretting it. Entering the market can be exciting and thrilling but you have to be careful where you are investing your hard-earned money towards. When picking up SIP plans, it is important to choose an amount you are comfortable spending and can consistently pay over the next couple of years to get the best returns possible.  3. Only for small investors or new investors This is a huge mistake while investing in SIP plans. Anyone can invest in SIP plans. Whether you are a financial advisor or a risk-averse investor, you can start a SIP for any amount and invest regularly. That is the beauty of SIP, it allows you to stay invested for a long at your own terms.   4. It is considered a short-term Investment SIP is not a short-term investment or a purely long-term investment method. It acts as both, the investor can decide how long they wish to stay invested, increase or decrease their SIP amount and even aim for big financial goals like a child’s education or retirement via SIP plans.   5. Not using the step-up SIP option Many investors do not increase their SIP amount and continue to invest at the same pace for a long duration. This is a huge mistake when selecting SIP plans and investing in them. As your income increases, it is important to increase your investments and SIP plan amount so that your financial goals are met in time and smoothly.  Which mutual fund scheme should you choose? Selecting the funds that are tailored to your investment requirement time horizon, income, target corpus, and risk appetite is the first critical step that you should take as a parent investing in your child’s education. One could start by investing in one fund and then diversifying to 2 or 3 funds by proportionately investing across the schemes. You should ideally aim for a smaller proportion of investments in small and mid-cap funds which bring in high returns (along with high volatility) and balance them with large-cap funds that have stable returns (lower than small and mid-cap). SIP calculator online for child education plans SIP calculator allows users to calculate and plan for child education. Users can calculate SIP over a period of time even before they start the investment process. SIP interest is based on compound interest. Just enter the amount you wish to invest and calculate your SIP. How to choose a mutual fund scheme for child education?  Choosing SIP plans depends on your financial goals. Ask yourself certain questions:   What are your long-term goals?  What are your short-term goals?  How much money do you wish to save for your retirement?  How much money can you save monthly and invest?  You can also consult a financial advisor who can help you create a financial plan to save for multiple goals and that can help you meet your daily wants and needs.   How to invest in SIP plans for child education on the EduFund App?  Step 1: Download and Sign up with EduFund  Go online with SIP plans with EduFund. Download the application and sign up with personal details. The whole signup process takes just 3 seconds.   Step 2: Identify your financial goals   The application provides a gamut of options for your child’s education. Evaluate the goal. You can save for short-term or long-term goals such as saving for school fees and saving for higher education in India or overseas. You can save for both simultaneously as well!   Step 3: Calculate the total cost with a FREE calculator  After identifying the goals, calculate the total costs of higher education for undergraduate or postgraduate studies.  You could calculate basing National or International academic education expectations. Select the specialization and the country you are seeking higher education.  Step 4: Get your investment map and invest  Soon after filing the details, you will get how much you could get after investing for the respective number of years. You will get a number of SIP plan suggestions that you could compare with yours.  You could increase or decrease the sum to invest monthly as per financials.  We provide an overview of your savings transitioning into returns until you get the investment sum. You could go for a lump sum payment if you are an entrepreneur with unstable finances.  Place the order as a secured investment through UPI or other methods. You could start with just ₹100 in Edufund SIP investments.  Step 5: Track, revisit and reset goals anytime  Once you set up a SIP plan, you can edit goals according to the revised economic situation. Edufund captures the sensitivity that comes with finances.  Revisit the plan and modify it as per goals and finances. You will get a new investment plan with new goals. Plan your savings accordingly.  Conclusion A financial strategy for your child’s education is an absolute necessity, given the high educational inflation that is prevailing in the world today. The strategy should factor in your income, target corpus, investment horizon, and risk appetite. Starting early in terms of investments lowers the financial burden in the future and helps you pave the path for your child’s dream career. There is no appropriate or right time to start investing in your child’s education because the right time is now. Note - The past track record of a fund is no guarantee of its future performance. FAQs Is SIP good for child education?  A SIP is a great way to save for your child’s education. You have the flexibility to select the amount and invest regularly in your chosen funds. You can also redraw the money when you need it or pause the SIP if you wish to do so. SIP is a systematic and disciplined way to save for your child’s future education.  Which mutual fund is best for child education?  Here are the top mutual funds that offer SIP for your child’s education:  Aditya Birla Sun Life Frontline Equity Fund  Axis Long-Term Equity Fund  Parag Parikh Flexi Cap Fund  SBI Equity Hybrid Fund  SBI Focused Equity Fund  Can I open a SIP for my child?  Yes, you can start a SIP for your child. Download the EduFund App and select the funds you like and start investing. How can invest in SIP for kids?  Explore several saving options on the EduFund app to save for your child’s future. Select the funds that suit your risk appetite and your goals. Invest an amount you are comfortable with and start saving!   Which SIP is best for kids?  Here are some mutual funds that offer SIP investments starting at Rs. 100 or Rs. 500:   Aditya Birla Sun Life Frontline Equity Fund   Axis Long-Term Equity Fund   Parag Parikh Flexi Cap Fund   SBI Equity Hybrid Fund   SBI Focused Equity Fund  Is a long-term SIP risky? Investing in SIP for the long term is highly effective and has lesser risk compared to making a lumpsum investment in mutual funds.  What is the best age to start a SIP? There is no right age to start a SIP. A systematic investment plan is a great tool to save for your child’s education. As many experts suggest, it is always beneficial when you have a long investment horizon, as it reduces the SIP amount needed to reach your goal. You need to invest early to have a long investment tenure. Investing early also may increase your returns on investment. TALK TO AN EXPERT DisclaimerMutual fund investments are subject to market risks and EduFund does not endorse any fund over another in this blog.

Smart Beta ETFs are often known as 'Strategic Beta' or 'factor-based' ETFs. True to their name, these ETFs smartly choose their underlying assets. These ETFs pick the primary assets based on factors other than market capitalization.  ETFs generally classify their investment strategies as active or passive.   However, each had its pros and cons So, avid thinkers and financial market gurus came up with a new approach that combines these strategies.  Most of the benchmarks today are constructed based on the market capitalization of the companies. The Market Capitalization of a company is the product of the share's market price and the number of shares.  The use of market capitalization resulted in the neglect of other vital factors which could better judge the overall health and performance of the company.  For the S&P500 index, we can see that the weights assigned are:  As evident from the above tree map, the S&P500 is heavily skewed towards Apple, Microsoft, and Amazon-leading to passive ETFs being heavily tilted towards large-cap companies, reducing their potential returns.  Smart Beta represents a new way to build the underlying index. Smart beta is an index design process that aims to achieve superior risk-adjusted returns than traditional market capitalization-weighted benchmark indices.  The fund's composition is set by various rules that exist whilst establishing the fund. These ETFs choose company stocks based on volatility expectations, dividend growth, total earnings, etc. Smart Beta ETFs strategies 1. Equal weightings Equal weight is assigned to the securities present in the index irrespective of the market capitalization of the firms.  For example, the Invesco S&P 500 Equal-Weight ETF (RSP) offers equal weights to the securities in the S&P500, unlike the index itself. 2. Fundamental weightings Fundamental weighting is done based on various company fundamentals. Fundamentals such as profit, total revenue, cash flow, etc., are used.  The Invesco FTSE RAFI U.S. 1000 ETF is one fund linked to the FTSE RAFI Index. The index uses reported financial metrics of the companies to weigh them. Metrics like cash flow, book value, total sales, and gross dividend consider the companies.  3. Low volatility weightings The weightings in such ETFs are by using the historical volatility of the stocks – higher volatility implies higher risk. The iShares MSCI EAFE Min Vol Factor ETF is based on less volatile stocks. 4. Factor-based weightings The technique entails weighing securities according to factors divided into levels. Growing smaller enterprises, underpriced valuations, and balance sheet components are examples of such variables.  Some examples of factor ETFs are iShares MSCI USA Size Factor ETF (SIZE), iShares MSCI USA Momentum Factor ETF (MTUM), and iShares MSCI USA Value Factor ETF (VLUE) - depending upon factors like size, momentum, and value, respectively. We delve into the details of these factors later. Advantages and Disadvantages of ETFs Advantages of Smart Beta ETFs Increase returns, reduce risk, and maximize dividends. Smart beta ETF methods aim to reduce market volatility exposure while outperforming standard ETFs. Offer a plethora of strategies to choose from to diversify their portfolio. Smart Beta ETFs are strategy-oriented; an investor can find a suitable ETF that is in sync with the investor's approach. Smart Beta ETFs have a higher expense ratio than passive ETFs but are still lower than actively managed ETFs. Disadvantages of Smart Beta ETFs Since this is a comparatively newer method, the volume of these ETFs on the market might be lower, thus causing liquidity constraints. Although the expense ratio of a smart beta ETF may be lower than those charged by actively managed funds, the savings may not be noteworthy. Investors must consider several factors. As a result, the price of a smart beta ETF may differ from the fund's underlying index value. Market-cap-weighted ETFs may beat smart beta ETFs in some market conditions. If you want to invest in a strategy that incorporates active and passive investing, you should look at smart beta approaches.  FAQs What are the advantages of smart beta ETFs? Here are the advantages of smart beta ETFs: Increase returns, reduce risk, and maximize dividends. Smart beta ETF methods aim to reduce market volatility exposure while outperforming standard ETFs. Offer a plethora of strategies to choose from to diversify their portfolio. Smart Beta ETFs are strategy-oriented; an investor can find a suitable ETF that is in sync with the investor's approach. Smart Beta ETFs have a higher expense ratio than passive ETFs but is still lower than actively managed ETFs. What is a Smart Beta ETF? Smart Beta represents a new way to build the underlying index. Smart beta is an index design process that aims to achieve superior risk-adjusted returns than traditional market capitalization-weighted benchmark indices.  The fund's composition is set by various rules that exist whilst establishing the fund. These ETFs choose company stocks based on volatility expectations, dividend growth, total earnings, etc. What disadvantages of smart Beta ETFs? Since this is a comparatively newer method, the volume of these ETFs on the market might be lower, thus causing liquidity constraints. Although the expense ratio of a smart beta ETF may be lower than those charged by actively managed funds, the savings may not be noteworthy. The price of a smart beta ETF may differ from the fund's underlying index value. Market-cap-weighted ETFs may beat smart beta ETFs in some market conditions. Reading the fund’s prospectus thoroughly is very important to understand all risks.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

Gold Mutual Fund vs Digital Gold, which is better, and which one should an investor choose? This blog will talk about the pros and cons of investing in these asset classes. Gold has been the conventional investment choice of Indian households over the years, but gradually individuals have realized that keeping physical gold has certain downsides, like storage costs, and more importantly, safekeeping, as it has a risk of theft and robbery. Investors have turned to Digital Gold and Gold Mutual Funds as both are modern-day preferred investment tools because of their value. The benefit of investing in both Gold Mutual Funds and Digital Gold is that investors will not need a Demat account for trading, nor will they have to worry about purity or making charges. What is a Gold Mutual Fund? Gold Mutual Fund, also referred to as Gold Fund, is described as an open-ended Mutual Fund that invests through units of Gold ETFs. Every Gold Fund has a fund manager who is responsible for buying and selling desired assets based on the investment objective of the fund. In a Gold Mutual Fund, the fund manager invests not in physical gold but in paper gold of 99.5% purity for generating an income.  What is Digital Gold? In the digital era, more and more investors are turning towards Digital Gold. It is a financial investment option where investors can trade gold units online anywhere and anytime.  Buying Digital Gold is like holding the 24k gold in a virtual safe instead of a physical vault or locker. Moreover, there are no safekeeping or purity issues; hence investors often consider it a safe bet in terms of investment. An overview of Gold Mutual Fund vs Digital Gold 1. Investment Gold Mutual Funds can invest in gold only through Gold ETFs. The fund manager cannot make direct investments in the stocks of gold packaging, processing, refining, and mining companies. As per SEBI Regulations, these investments fall under the thematic category and cannot be considered Mutual Funds.  Invest in Gold Mutual Funds on the Edufund App with help from qualified advisors.   Digital Gold can be purchased online by anyone, at any place, and at any time. Investors do not need a fund manager for such investments as it can be done through mobile wallet apps like PhonePe, Google Pay and Paytm, etc.  Invest in Digital Gold through Edufund DigiGold Interface, which is easy to operate, understand and manage. Investors can see the invested amount, quantity of gold holdings, % returns, and the current value of their investment on a single screen.   2. Performance The performance of the Gold Mutual Funds depends on the ongoing fluctuations in the price of physical gold.  The Digital Gold price is similar to that of the current rate of physical gold in the market, hence the price that you see is for both physical and Digital Gold.  3. Trading It is possible to invest just INR 100 in a Gold Mutual Fund.  Investors can also trade online 1 gm of Digital Gold at the prevailing market price.  4. Liquidity Both Digital Gold and Gold Mutual Funds are considered highly liquid investments, although Digital Gold can be sold more easily online in a minute without any hassles, while the investor will have to submit the redemption form to the fund house. Investors will then receive an equivalent value in their account.   With the help of the Edufund App, the process of selling Gold Mutual Funds and Digital Gold is hassle-free, and the money is transferred to the account within 48 hours.  5. Convenience Gold Mutual Funds offer less convenience than Digital Gold as they have to be handled through proper channels by a fund manager, whereas Digital Gold can be handled by any individual.  6. Regulatory Body Gold Mutual Funds are regulated by SEBI, and fund houses will have to follow the strict SEBI rules, while Digital Gold has no authorized regulatory body as it is run by independent trustees. Conclusion Smart investors understand that gold is a sure bet against equity investments and inflation, and hence it is better to invest in gold when it comes to diversification of assets. What has changed the mindset over the years is the preference for Gold Mutual Funds and Digital Gold instead of physical gold. Investing in Gold Mutual Funds vs Digital Gold actually depends upon individual preferences. Hope the above-mentioned blog gives better clarity on both asset classes. Consult an expert advisor to get the right plan TALK TO AN EXPERT

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.  The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries   Let us talk about the consumer product – DSP Global Allocation Fund.  About the DSP Global Allocation Fund  Investment objective The primary investment objective of the Scheme is to seek capital appreciation by investing predominantly in units of BlackRock Global Funds - Global Allocation Fund (BGF - GAF). The Scheme may also invest in the units of other similar overseas mutual fund schemes which may constitute a significant part of its corpus. The Scheme may also invest a certain portion of its corpus in money market securities and/ or money market/liquid schemes of DSP Mutual Fund, in order to meet liquidity requirements from time to time.  Portfolio composition  The portfolio that holds major exposure is Information Technology which accounts for roughly 10% of the portfolio. The top five sectors hold nearly 33% of the portfolio.  Note: Data as of 31st Dec 2022. Source: DSP MF  Top Ten Holdings of DSP Global Allocation Fund Name Weightage % Microsoft Corporation 1.70% Apple Inc 1.60% Alphabet Inc Class C 1.20% Amazon.Com Inc 1.10% ConocoPhillips 0.90% Humana Inc 0.80% UnitedHealth Group Inc 0.80% Marsh & McLennan Inc 0.70% Enbridge Inc 0.70% Sempra 0.70% Note: Data as of 31st Dec 2022. Source: DSP MF  Performance Note: Data as of 31st Dec 2022. Source: DSP MF  The fund has generated a CAGR (Compounded Annual Growth Rate) of 6% since its inception.  Fund manager  Mr. Laukik Bagwe is the fund manager and brings over 22 years of total professional experience. He has been managing the scheme since August 2014. He has previously worked with Derivium Capital & Securities Private Limited, and Birla Sunlife Securities Ltd. He holds a B.Com, and PGDBA (Finance).  Mr. Jay Kothari, Vice President & Product Strategist has been managing the fund since August 2014. He is the dedicated Fund Manager for overseas investments and has been with DSP Investment Managers since May 2005, and has been with the Investment function since January 2011. Jay joined the firm as a member of the Sales team (Banking) in May 2005. Prior to joining DSPIM, Jay worked for Standard Chartered Bank for a year in the Priority Banking division. Jay completed his Bachelor of Management Studies (Finance & International Finance) from Mumbai University, followed by an MBA in Finance from Mumbai University.  Mr. Kedar Karnik has been managing the fund since July 2016. He joined DSP Investment Managers from Axis Asset Management and has over 17 years of investment experience. He has done his Masters in Management Studies from Jamnalal Bajaj Institute of Management Studies. He has over a decade of investment experience. He has previously worked with HSBC Asset Management and CRISIL Ltd.  Who should invest in DSP Global Allocation Fund?  Experienced Investors with a well-set core portfolio, looking to diversify no more than 10-15% of portfolio internationally.  Investors looking for international diversification, especially in US companies & wanting to hedge portfolios.  Investors have the patience and mental resilience to remain invested for a decade or more.  Investors not looking to chase the highest returns.  Why invest in this Fund?  Offers the potential to grow your wealth by investing in a well-diversified portfolio all around the world.  Get access to well-known, large companies that are difficult to invest in directly for Indian investors, like Google, Amazon, Facebook, Comcast, Berkshire Hathaway, etc.  Reduce portfolio volatility by investing in a foreign market that has a low correlation to the Indian stock market & may thrive even when Indian stocks fluctuate.  Get the additional benefit of currency diversification.   Time horizon  One should look at investing for a minimum of 10 years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The DSP Global Allocation Fund was launched in August 2014, and in its track record of eight years, the fund has delivered ~6% CAGR consistently. Thus, it is best for investors who are willing to take international equity exposure in the portfolio and is looking to remain invested for a longer period.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.