Fall 2024 Scholarship: Get Up to $10K for Your Master's Abroad! Fall 2024 Scholarship: Get Up to $10K for Your Master's Abroad!

Apply now

EduFund Blogs

Why investing in the US stock market is important?

Why investing in the US stock market is important?

Moving to America, living in the Big Apple, and making money in US dollars – is an aspiration of millions of Indians. While moving to America may not be possible for everyone, one thing is definite, you can make money in US dollars from anywhere in the world with just one tap! How? By investing in US stock markets, you can invest in dollars and watch your money grow greener.   The US stock exchange is the world’s largest investment market in the world. It offers tremendous opportunities for growth and allows investors from across the globe to invest in selected securities, stocks, and ETFs across indices.   Indian investors who hold Indian stocks have the option to own some of the world's most extensive blue-chip reserves located in India.  Invest in US Stocks Let's look at some reasons you should invest in the US stock market while building a portfolio.  Geographic diversity  All of the key US stock exchanges have companies listed worldwide, making it a potential investment destination. Investing in the US share market diversifies your financial portfolio while investing in worldwide companies.   A national emergency could lower the rating. The effect, however, would be negligible. On the other hand, Indian firms dominate Indian indexes. Even minor unrest in the nation might send the indexes crashing.   The American stock market is varied and robust in times of adversity. However, in India, this is not the case.  Asset-based diversification, industry-based diversification, time-based diversification, and geography-based diversification are the four core tenets of diversification.   Whereas most investors are good at asset, industry, and temporal diversity, most investors' portfolios lack geographic diversification. Your holdings are not confined to a single location when you use a geography-based diversification approach.  Benefits of Investing in the US Stock Market Read More Participating in the largest stock market  The equity market in the United States is the largest in the world. The US financial markets accounted for 54.5 percent of worldwide stock market value as of December 2021.   As of March 2022, the New York Stock Exchange (NYSE), the world's largest stock exchange, had a market capitalization of about $27.69 trillion.  US Stock Market Timing Read More Being a part of global companies  Some of the brands we use daily, such as Facebook (now Meta), Apple, Google, Amazon, and others, are publicly traded in the United States.   In addition to these global giants, you can also buy shares in new firms in industries that are bound to expand across the globe, such as AI technologies, cloud-based services, and electric cars.   Investing in firms or ETFs registered on the US securities exchange can provide exposure to these areas.  Source: pixabay Better potential results  The US equity market has a higher return than the Indian share market. The NYSE lists companies from all over the world and those from the United States.   Investments in US stocks can help you get a good return on your money because global corporations are there, and the return you receive will be high due to various factors.  Explore US Market Access to fractional investing  Unlike India, you can hold US stocks in fractions. After all, buying a single Google share is out of range for most individuals.   You can own a part of the company for as little as Rs 1,000 or even less. You can acquire more or build a portfolio of US shares over time if you only have a certain amount of money.  Currency gains  According to historical data, the Indian Rupee has been losing value against the US dollar, and there is a probability that this trend may continue.   The rupee-to-dollar exchange rate influences the profit you make from foreign equities. Any weakening of the rupee helps to boost profits if dollar-denominated investments such as US shares appreciate.   Even if global markets are disappointed or remain steady, you benefit if the rupee falls against the dollar.  Apart from these worldly benefits, one also has a few psychological benefits associated with such investments. Such investments help fulfill your aspirations and goals conveniently.   We all have ambitions to study, travel, or even live overseas worldwide. When you invest in the stock markets of the United States, you are trading in US dollars, so you may effortlessly save for all of these worldwide goals without having to worry about currency risk.  Investing in US equities from India is easy, straightforward, and rapid. You can purchase Nasdaq stocks or trade thousands of ETFs and stocks on other top indexes such as the S&P 500, Nasdaq 100, Dow 30 or Russell 2000 Index from India.  The US stock market contains a diverse range of top worldwide corporations, from technology to pharmaceuticals and from large-cap to small-cap equities.   The FAANG stocks – Facebook, Apple, Amazon, Netflix, and Google – are ready to be bought now that the US share market is showing weakness. It's time to start accumulating them to build long-term riches! FAQs Why should I invest in the US stock market as an Indian investor? Investing in the US stock market offers geographic diversity, access to global companies, better potential results, fractional investing, and currency gains, providing opportunities for growth and diversification. What are the advantages of geographic diversification in the US stock market? Geographic diversification allows you to invest in companies listed worldwide, reducing risk by not being confined to a single location and providing exposure to a variety of markets and economies. How can investing in the US stock market give me exposure to global companies? Many global giants, such as Facebook (now Meta), Apple, Google, and Amazon, are publicly traded in the US. Additionally, investing in US securities exchanges allows access to emerging industries like AI technologies, cloud-based services, and electric cars.
Maximize Your Investments: Understanding Premium and Discount

Maximize Your Investments: Understanding Premium and Discount

“ETF trading at a premium?” or "What's the deal with ETF B selling at a loss?" Y. These are some questions you are likely to hear whenever advisors talk about ETFs. You can understand this better if you understand the different costs of ETF transactions.  ETFs have multiple "prices," as perplexing as they may appear. There's the actual value, determined by the net asset value (NAV) after each day and the intraday NAV (iNAV) in the midst.   The NAV of bond ETFs is set by the bid prices of the portfolio's underlying bonds. The NAV of an equity ETF is given by the most recent trading prices of the underlying stocks. The NAV is calculated based on the previous trading day's closing.  However, since ETFs are actively traded on a stock exchange, they have a current market price which may differ from their actual value. This market price will determine the premiums and discounts.   The ETF's latest traded price determines the market price of both equities and bond ETFs. For a stock ETF, that price will often fall within the bid-ask spread of the underlying basket of securities, but bond ETFs would more likely trade at a premium because the NAV is set at the lesser bid price.  If the price of an ETF is higher than its determined NAV, it trades at a "premium." In contrast, if the ETF's price is below its NAV, it trades at a "discount."  ETF prices and NAV are often closed in relatively calm markets. When stock markets become choppy, however, ETFs respond swiftly to shifts in market sentiment, whereas NAV may take longer to adjust, leading to premiums and discounts.  Let's look at it illustratively,   The market price of an equity ETF will often fluctuate within the basket's bid-ask spread. When the ETF's supply and demand are roughly balanced, trading takes place on the secondary market.   The ETF's market price may be momentarily pushed outside the limitations of the fundamental basket when there are more buyers and sellers in the market. Traders might profit from the gap between the ETF's market rate and the prices of the underlying securities if the ETF trades at a significant premium or discount.  When this occurs, the market maker can go to the primary market to deal with the ETF sponsor, issuing new ETF units when prices increase and redeeming ETF units when supply is low.   The primary market aids in re-aligning the ETF market price with the NAV. However, because the expenses are determined by the creation/redemption process, the ETF would often trade at a higher premium or discount to mirror those costs until the two-way order flow in the ETF recovers.  Since the ETF and its fundamental securities are two separate liquidity pools that are only loosely connected, this can happen at any time during the trading day.   Suppose bullish investors start bidding up an ETF more aggressively than its underlying securities. In that case, the ETF's price may climb faster than the underlying securities' price and, as a result, trade at a premium.   Similarly, if bearish investors sell an ETF aggressively, it may trade at a discount to its underlying stocks. Alternatively, premiums or discounts may develop if the ETF and its constituent stocks trade on exchanges in separate time zones.  Pricing transparency is offered through ETFs, which allow you to acquire the intraday price of any asset type. The problem is that the trade costs are explicit unlike mutual funds, they are not reduced to a single number by the end of the trading day.  It's critical to keep trading expenses in mind, especially in less liquid markets, and to resist following the herd, which can lead to acquiring at a markup and selling at a discount.   Despite their "designed for speed" nature, ETFs are still the best choice for long-term exposure to specific asset classes. FAQs What is the difference between the actual value and the market price of an ETF? ETFs have an actual value determined by the net asset value (NAV) based on the underlying securities prices. The market price, on the other hand, is influenced by supply and demand on the stock exchange and may differ from the actual value, leading to premiums or discounts. What does it mean when an ETF trades at a premium or a discount? If an ETF's market price is higher than its determined NAV, it trades at a premium. Conversely, if the ETF's market price is below its NAV, it trades at a discount. Premiums and discounts occur due to the interplay of supply and demand in the market. Why do premiums and discounts occur in ETF trading? ETFs respond swiftly to shifts in market sentiment, causing their market price to fluctuate more quickly than the NAV. In choppy markets, this can lead to premiums or discounts as the market price adjusts while the NAV may take longer to catch up. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT
How to plan your child's bachelors in Australia?

How to plan your child's bachelors in Australia?

Previously we discussed 5 things to consider before sending your child abroad for education. In this article, we will discuss how to plan your child's bachelors in Australia. Are you planning your child's bachelor's in Australia? Why wouldn’t you? Australia's excellent educational system, laid-back nature, with high living standards make it a perfect choice for parents and students alike. https://www.youtube.com/watch?v=MwQWKYxxJ8o How prospective is Australia in pursuing a bachelor's education?  The unique opportunities of studying bachelor's in Australia extend beyond the classroom program. It is about getting an excellent culture for study and work. There are great placement opportunities with average to good salary packages. There is also the flexibility of part or full-time study programs.   Given the job opportunities and thriving conditions in sectors like finance, tourism, education, agriculture, and construction in Australia, students have ample options to choose from for jobs.    The post-pandemic reforms introduced by the Australian government like extending student work hours, offering students to return to Australia to find work on their work permits as well as increasing the tenure of post-work visa has made Australia can an excellent place to not only study but to build a career.   https://www.youtube.com/watch?v=Ew2MC3RCo68 Let's look at some prominent reasons to choose Australia for undergraduate studies. University offers academic excellence   Australia has some of the best universities, offering top education systems for international students. The quality of education and commitment of faculty is evident in the international ranking that the universities get.     Internships and placements are advantageous   Most study programs in Australia offer internships or placement opportunities. With unique options, students get a chance to have better experiences and discover advanced jobs or career opportunities. It gives way to better understanding skills and improves communication among aspirants.   The study program with scop for an internship is beneficial as it gives students a work experience with practical experience. From this, students get an understanding of work-life culture. They can learn how to implement their study of course program into the practical field. Therefore, internships are golden scopes for students to acquire knowledge, apply it in-field, and eventually hone their skills.   That being said, choosing a bachelor's program that offers either an internship or good placement opportunities for students is better. Discover a welcoming university life   Australia is the right place to provide adequate support to international students. Be it about getting a job, finding accommodation, networking, and others, it has plenty of options.   Therefore, Australia has a welcoming environment for international students, helping them adjust to the new education system. In addition, it helps students organize and get accommodation easily.   The universities focus on a problem-based learning approach, helping students become independent learners. The class patterns are flexible, and the study approach makes it easy for the students to cope with the educational system.   source: pixabay What is the cost of living in Australia?  Before packing your child’s bags, make sure you are aware of the study program packages in Australia and the cost of living. Top-class education isn’t cheap and so check its scholarship options available for international students. There are eligibility criteria to avail of scholarships, and one should check them before applying.   1. Tuition fees   The Australian universities’ tuition fees are among the highest in the world. For a bachelor’s degree, it is 20000 and 45000 AUD yearly. The private ones are more costly and may not offer scholarship benefits.   2. Accommodation fees   The on-campus accommodation is affordable, which starts at around 440 AUD monthly than any other accommodation in Australia. The rent of a place may take around 1300 AUD to 1750 AUD. Even the monthly grocery costs are around 300 to 600 AUD. So, the overall living costs are approximately 1200 AUD monthly in some cities, which can rise to 1500 AUD in other cities.   Plan your expenses, and make sure you have some money left for monthly savings. When planning to send your child for a bachelor’s in Australia, it is important to have this in mind.   The Hidden Cost of Education in Australia Read More How do financially plan for your child’s bachelor's?  Whether you pick Australia or any other country for your child’s bachelor's, you need to start saving. The average cost of education is rising at an unprecedented rate and the only way to meet this cost is to start saving aggressively!   Today, the yearly expense to support your child in Australia can be anywhere between Rs. 10-20 lakhs. This cost greatly varies based on your child’s needs and lifestyle, however, it’s important to remember that your child may have to pay double this amount when it’s their time to study in the country due to education inflation.   So, calculate in advance how much you need to send your child to Australia, create a financial plan with the help of an expert, and start saving via SIPs to ensure you have the funds you need when it’s time to send your child to the land of opportunity!  FAQs How do I start planning my child's bachelor's degree in Australia? Start by researching universities and courses in Australia. Consider factors such as reputation, rankings, course offerings, and tuition fees. Look into admission requirements, including English language proficiency tests. Plan for accommodation, student visas, and finances. Seek guidance from education consultants or online resources. What are the steps to apply to universities in Australia? Check application deadlines and gather required documents, including academic transcripts, English language test scores, and recommendation letters. Submit online applications through the university's admission portal. Pay the application fees and monitor communication from the university regarding the application status and any additional requirements. How can I support my child's transition to studying in Australia? Help your child with pre-departure preparations, such as obtaining a student visa, booking flights, and organizing travel insurance. Familiarise them with Australian culture, lifestyle, and local customs. Connect with university orientation programs and student support services. Encourage open communication and emotional support throughout their journey. TALK TO AN EXPERT
How to invest in index funds?

How to invest in index funds?

Individuals' interest in index funds is increasing due to an overarching desire to compound and capitalize on wealth.   Amid constant volatility in markets, it has become imperative to explore investment ways that dilute any potential risks of losing on high-return investments.  This is why people are incredibly inclined toward building different buckets instead of leaving all eggs in a single basket. In investment terms, diversifying the portfolio by investing in different equities and sectors is one of the best techniques to evade market risks.  It is where investment in index funds emerges as a market dominator in the current Indian scenario.   What are Index funds?  Index funds work differently from active funds. These funds are appropriate for those wishing to evade risk and diversify investment. One can only manage the investments passively.   It implies that a person cannot invest directly in an index but through mutual funds called “Index Funds.” A manager or investor invests in the same equities as present in the index.  The market index leverages a company’s market capitalization to determine the total weightage of securities in the index. The total value of the company shares is equivalent to the number of outstanding shares.  As per Economic Times, “Since February 2020, the number of index funds has surged 144% and the assets managed by these investors grew by 590%”.   As a part of the ongoing research by the Economic Times, “The number of index funds grew from 32 in February to 78 in July 2020”. ETF draws the investor’s interest during this phase.  https://www.youtube.com/shorts/FlrxZAJjemE Who should invest in index funds?   Investments in index funds are profitable only for a selective bunch. If you meet the below investment behavior, index funds are just right for you:  You wish to evade any risks associated with investment/slash investment risks  You want to diversify your portfolio by starting and investing a low amount  You prefer to invest only a fixed amount in a particular index fund  You would like to invest in multiple investment forms – like real estate, gold, equities  Early savings help in child's future Read More How to invest in index funds?   Index Funds are a type of investment vehicle like mutual funds and exchange-traded funds that help achieve results on specific indexes. Here is how you can invest in index funds:   1. Figure out your investment goals  Before investing, it is important to ensure clarity over the present and future financial goals.   When do you want to retire?   How long till you achieve your financial goals?   What do your risk appetite and budget look like?   2. Pick one index to invest in  Index Funds, apart from helping diversify the investment, track broad sectors like large capitals and emerging markets. Different index types serve different purposes.   While deciding on the index to invest in, analyze the below parameter:   Which industry do you share knowledge in and is growing lately?   How much is your risk tolerance?   What are the company size and market capitalization?  What index fund would you find comfortable investing in (stocks, bonds, or commodities)?   Highlighting and improvising on these parameters will help you choose the right index fund. It will help build a growth foundation.   3. Decide the index funds to invest in  Each fund and company has different marketing capital, growth potential, and shares available to invest in. The best research method is by researching Asset Under Management (AUM). It is the total investment value that an expert manages on the client's behalf. Analyze the AUM index of a given fund and the ease of trading.  Here are some best index funds for 2022:  IDBI Nifty Junior Index Fund Growth  ICICI Prudential Nifty 50 Index Plan Direct-Growth  UTI Nifty Next 50 Index Fund Direct-Growth  As per ClearTax - “IDBI Nifty Junior Index Fund Direct Plan-Growth, is one of the most profitable index funds in India."  Index funds companies can vary in their short and long-term costs.  4. Sign up for a brokerage account   After signing up for a brokerage account, utilize the above points to figure out the best index funds to invest in. Here, an investment expert may help you meet the purpose according to your financial goals.   In the initial stage, having expert backing works well. An expert can help you develop an investment strategy that aligns with personalized financial goals. It makes investment in index funds a smooth journey.   5. Manage investments cautiously   It is important to manage and check potential opportunities for growth. Start with small investments and set up automatic monthly deductions. Monitor the fluctuations and returns throughout the year. Modify the strategy if the market demands.  While Index funds are a great way to start investing, it's good to remember no market is without risks. FAQs What are the benefits of investing in index funds in India? Index funds offer benefits such as broad market exposure, diversification, low costs, and simplicity. They track a specific index, like the Nifty 50 or BSE Sensex, providing exposure to multiple stocks. Their passive nature keeps costs lower compared to actively managed funds. Index funds are easy to understand and suitable for long-term investors seeking market returns. How can I choose the right index fund in India? Consider factors like the index being tracked, fund performance, expense ratio, and fund house reputation. Look for funds with a low tracking error and a consistent track record. Evaluate the fund's size and liquidity. Read the scheme's offer documents, prospectus, and seek expert opinions to make an informed decision. What are the risks associated with investing in index funds in India? Index funds are subject to market risks and fluctuations. Their returns are influenced by the performance of the underlying index. If the index experiences a downturn, the fund's value will also decline. Additionally, tracking errors may occur, resulting in deviations from the index's performance. It's important to understand these risks and have a long-term investment horizon when investing in index funds. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT
What is ETF liquidity?

What is ETF liquidity?

ETFs (exchange-traded funds) give investors access to a diverse portfolio of equities and bonds.   They're versatile investment vehicles employed in various ways within a portfolio to fulfill different investment requirements and objectives. ETFs, like stocks, can be traded on an exchange at any time of day.  An advantage associated with the ETFs compared to their mutual fund counterpart is the liquidity related to the ETFs. ETFs are a substitute for holding several stocks.   However, unlike stocks, ETFs have a very different connotation associated with liquidity.  ParameterETFSharePriceBased on underlying securitiesBased on the supply and demand metrics of the shareSupplyOpen-ended i.e. can be created and redeemed as per needClosed-endedPrimary Source of liquidityLiquidity of underlying securitiesThe trading activity of the sharesThe best measure of liquidityThe trading volume of underlying securitiesThe trading volume of share What are E-Retail ETFs? Read More Two different types of allied ETFs liquidities - Primary and Secondary Liquidity.  Primary liquidity  The primary market is where the process of creation and redemption takes place. If a designated broker or market maker sees a demand for a specific ETF, they can issue new units by delivering a basket of assets to the ETF sponsor.   In exchange, the ETF sponsor provides the market maker with ETF units of equal value, which the market maker subsequently sells publicly on the business to meet investor demand. In the event of redemption, the process can be reversed when the supply of units exceeds demand.   The primary market is concerned with the high demand and supply of institutional or non-institutional investors who buy and sell ETF shares in bulk in tandem with the Authorized Participant.   In the primary market, investors utilize an "authorized participant" (AP) to adjust the supply of ETP shares available either to sell a large basket of shares ("redeem") or to buy a large basket of shares ("create").  Primary Liquidity is the liquidity associated with the ease of creating and redeeming ETF shares with the help of underlying securities. The liquidity of the underlying securities plays a significant role in determining the liquidity of the ETF shares in the primary market.  Source: freepik Secondary liquidity  Secondary Liquidity is the liquidity associated with the already created ETF shares in the stock market. This liquidity is generally the visible liquidity on the market.   The non-institutional investors or investors with a smaller scale of operations generally are concerned with this type of liquidity. Investors buy and sell ETF units on the secondary market without the involvement of the ETF issuer.   Individual investor transactions take place at market prices throughout the trading day. The determinants of the liquidity of Primary and Secondary Liquidity of ETFs are very different.   Liquidity in the primary market depends upon the value of the underlying shares that back up the ETF. While liquidity in the secondary market depends upon the weight of ETF shares traded.   When executing a large trade that runs into thousands of ETF shares, investors can circumvent an illiquid secondary market by directly engaging with the AP to create new shares in the primary market.   The liquidity of the underlying securities and the liquidity of the ETF in the primary market share a direct relationship. The more efficiently an AP can access the underlying market, the more ETF shares it can create and redeem.  Unfortunately, most retail or small-scale institutional investors rely on secondary markets for their portfolio allocation. The liquidity in the secondary market can be judged by various statistics such as average spreads, average trading volume, and premiums or discounts, i.e., the value of the ETF (is it near the NAV).  The volume of an ETF is often seen as a measure of liquidity, which is incorrect. The liquidity of an ETF is influenced by the liquidity of the underlying securities, whereas trading volume is affected by investor activity.  Suppose an ETF invests in securities with limited supply or that are difficult to trade. In that case, market makers may be unable to create or redeem units of the ETF, affecting the portfolio's liquidity FAQs What is ETF liquidity and why is it important for investors? ETF liquidity refers to the ease with which an ETF (Exchange-Traded Fund) can be bought or sold in the market without significantly impacting its price. Liquidity is crucial for investors as it ensures that they can enter or exit their ETF positions swiftly and at a fair market price. How is ETF liquidity determined? ETF liquidity is primarily determined by the trading volume and the presence of active market makers. Higher trading volume indicates greater liquidity, as it implies a larger number of buyers and sellers. Additionally, the involvement of market makers, who provide continuous bid and ask prices, enhances liquidity by facilitating smooth transactions. What are the advantages of investing in highly liquid ETFs? Investing in highly liquid ETFs offers several advantages. Firstly, it ensures ease of buying and selling, allowing investors to enter or exit positions promptly. Secondly, high liquidity reduces the bid-ask spread, resulting in lower transaction costs. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
ETF
Unlocking Opportunities: How to Invest in Coca-Cola from India

Unlocking Opportunities: How to Invest in Coca-Cola from India

‘Har Rishta Bola, Mere Naam Ki Coca-Cola' - is one of the most successful marketing strategies and ads India has ever seen. Every Indian has had Coca-Cola in his life and gone back for more!   This MNC has been present worldwide and has been doing great business since its inception and launch on 29th January 1892. The Coca-Cola Company (KO) is the most valuable soft drink brand in the world, with worldwide revenues touching 38.66 billion US dollars!  Coca-Cola is also available in nearly every country on the earth. Primarily due to its broad and comprehensive distribution system that ensures that the company's products reach their end customers quickly and efficiently.   It is also a brand with a high level of worldwide brand awareness. Customers worldwide trust the company and are more likely to choose it over its competitors like Pepsi, Keurig Dr. Pepper, or Red Bull. A highly successful marketing campaign has bolstered Coca-Cola.  While Coca-Cola continues to be the most common choice, the company also owns other well-known products and brands such as Sprite, Fanta, and Minute Maid which have been a huge success in the Indian subcontinent.   The company has experimented with minimal sugar and nil sugar products like Coke-Zero, and created beverages like iced teas and flavored water, in response to the rising demand for healthier beverages.  The Coca-Cola Company's shares (KO) are available for investment on the New York Stock Exchange, with all values in US dollars. Let's first look at some basic stuff associated with the company.  Latest market close$62.5752-week range50.17 - 63.02Dividend yield 2.81%Earnings per share$2.25Beta0.66Market Capitalization$ 272 billionAverage Volume (3m)19,665,333PE ratio 27.75 There are three ways in which you can invest in Coca-Cola from India  1. The direct way  You can trade in Coca-Cola from India by registering on a US brokerage account using apps that offer US stocks or foreign investment opportunities. You can either invest directly through its apps through a minimal brokerage or zero brokerage. All you need is a bank account, your Aadhar card/proof of address and your PAN card to get started.    2. The ETF way  Investing via ETFs in Coca-Cola is another way to invest in the company from India. ETF stands for Exchange-traded fund. It is a group of stocks and bonds compiled by ETF managers to help you invest more efficiently.    ETFs are similar to Mutual Funds and they are managed differently. ETFs are traded on a stock exchange like stocks and are a more efficient way to buy shares of big companies and an affordable way to enter a highly competitive market.   Some ETFs like Consumer Staples Select Sector SPDR Fund ETF, contain Coca-Cola as one of its top holdings. The ETF's holdings include food & essentials, retail, household items, food products, and other industries. You can easily invest in these through different investment platforms from the comfort of your home with no physical paperwork.    Another option for investing in Coca-Cola through investing in S&P 500. For instance, Coca-Cola is a part of the Motilal Oswal S&P 500 Index Fund; by investing in this fund, you can be a shareholder of Coca-Cola!  An exciting fact is that in order to invest in the above ETFs, you don’t need to create a US account! However, if you are planning on investing in MNCs, there are some benefits of creating a USA brokerage account so that you can track errors that directly affect your returns.   3. The Mutual Fund way  Mutual Fund is the third way to invest in Coca-Cola from India! There are various mutual funds that invest in a large set of companies. You can choose the kind you wish to profit from. There are no caps on investment in Indian rupees, there is no investment restriction.   Coca-Cola is included in several mutual funds, such as the ICICI Prudential US Bluechip Equity Fund but the exposure to this company is largely limited and the expense ratio can affect your returns.  The expense ratio is problematic because investors have to pay an additional expense charged by core global schemes in addition to the administration fee charged by Indian fund houses.      These are some ways to invest in Coca-Cola from India! The company is a global mammoth and being an investor with them comes with its own highs and lows. So, before you start investing your money, understand the risks involved before jumping the gun. FAQs How can I stay updated on Coca-Cola's performance and financial news? To stay updated on Coca-Cola's performance and financial news, you can utilize various sources. These include official company announcements, investor relations websites, financial news portals, business news channels, and reputable financial publications. Regularly monitoring these sources will provide you with valuable insights into Coca-Cola's financial health, strategic developments, and market trends, allowing you to make informed investment decisions. Are there any risks associated with investing in Coca-Cola from India? Like any investment, investing in Coca-Cola from India carries certain risks. These risks include fluctuations in the stock market, changes in consumer preferences, competitive pressures, currency exchange rate risks, and geopolitical factors. It's important to conduct thorough research, diversify your investment portfolio, and consider your risk tolerance before investing in any company, including Coca-Cola. Can I directly purchase Coca-Cola stocks on the Indian stock market? No, you cannot directly purchase Coca-Cola stocks on the Indian stock market. Coca-Cola is a multinational company, and its stocks are listed on foreign stock exchanges like the New York Stock Exchange (NYSE). However, you can invest in Coca-Cola indirectly through mutual funds or ETFs that include Coca-Cola stocks or by considering international investment platforms like EduFund that allow Indian investors to trade in foreign markets.
Parent's Guide: Key Considerations Before Sending Your Child Abroad

Parent's Guide: Key Considerations Before Sending Your Child Abroad

44% of Indian parents wish to send their kids abroad for further studies. This is a life-changing decision that should not be taken lightly. Here are five things to consider before sending your child abroad. 1. Finding a right course  Numerous universities offer a wide range of courses that have a high demand in the professional world. It is a daunting task to find the perfect course for your child. You must understand what your child wants to pursue in such a situation.   Once you are clear with your child’s wish, start searching for universities that are known for that program. Make a list of it, and understand the ROI and the level of exposure. There are specific points that you must keep in mind while choosing the course, which is:  Subject covered in the particular course  Campus Location of the Institute  Career Prospects of the Course  Demand in the Industry  Try to ensure that these points align to improve your child's career growth and environment.   2. Comparing and choosing the right university  Once you have a list of universities, you should shortlist the college that fits perfectly with your child’s interest and growth. For proper analysis, you must keep a tab on your budget and the university’s location. Furthermore, analyze the faculty qualifications, student-teacher ratio, number of students in a class, and so on.  Although it may seem to be a challenging task, make sure you adhere to all of them. You can always reach out to experts who can guide you in your quest!   Source: pixabay 3. Selecting the right country  The selection of the correct country is made based on various factors. It is usually challenging to list a particular country’s pros and cons. Some of the significant factors that you need to keep in mind while selecting the country are:  Types of Universities  Lifestyle and Culture  City of Town of the Country  Job Opportunities  Safety  Budget  Quite often, parents ignore the cost aspect when deciding which country is the best place for their child. This is a huge foresight because it can throw you off budget and increase your spending by lakhs!   4. Know all deadlines and costs of applying   The application process can be daunting for first-timers. Every university has its own criteria for admissions. Ideally, the application process takes six to eight months to complete and requires the candidate to pay for application fees, exam fees, student stay deposits as well as fulfill visa requirements, etc. These require thorough planning and spending so it’s always good to prepare for every expense in advance to help your child.   To understand the different costs involved in the application process, you can always reach out to professionals and get details of the actual breakup of the total amount required. This can help you can manage your funds.  Source: Pixabay 5. Safety of your child  The safety of your child holds paramount importance. Ukraine - Russian war and its spread of COVID-19 have severely impacted the way we think of medical emergencies. As a parent, you have the right to ensure your child lives in a safe environment. So do your due research on the country, your child’s accommodation facilities, healthcare facilities, town or city area, and the cost required for an average lifestyle, and buy health insurance to secure your child’s needs.    Reputed institutions have strict guidelines and protocols for the safety of their students. Another primary concern revolves around robbery and theft. You must train your children about safety measures and digital payments. Always invest some amount of money in travel insurance. Countries have different levels of crime rates. Read the statistics given online and choose wisely.   From selecting the right course to safety, parents need to consider all these factors before sending their child to a foreign land. Not considering these things can increase your financial as well as mental stress so try to prepare for every eventuality to give your child the best study abroad ever! FAQs How can I financially plan for my child's education abroad? Financial planning is crucial when sending your child abroad. Research the cost of tuition, accommodation, and living expenses in the chosen destination. You can use the EduFund Cost Calculator for that. Explore scholarships, grants, and financial aid options available for international students. Set a budget and encourage your child to manage their finances responsibly. Consider opening a bank account in the host country for easier transactions. Look into education loans specifically designed for studying abroad. You can explore EduFund Scholarships for the same. Consult with a financial advisor to understand the tax implications and any additional financial considerations when sending money abroad. What factors should I consider when sending my child abroad? Consider the destination's safety and security, the quality of education, cultural and language differences, the cost of living, and the support available for international students. Research the country's crime rates, political stability, and the healthcare system. Evaluate the reputation and ranking of universities, available scholarships, and career prospects. Understand the cultural norms, language barriers, and the support services offered by the institution for international students. Lastly, calculate the cost of tuition, accommodation, and living expenses to ensure it is affordable for your family. What steps should I take to ensure my child's academic success while studying abroad? Emphasize the importance of effective time management and organization skills. Encourage them to familiarize themselves with the curriculum, course requirements, and assignment deadlines. Advise them to actively participate in class, ask questions, and seek clarification when needed. Help them create a study routine and find suitable study environments.
Financial planning tips for parents

Financial planning tips for parents

The cost of education increases every year but this cost is not uniform; there are some degrees that cost more than others. Some expensive degrees like MBBS, MBA, Psychology, Law, and Dental cost up to a crore; this includes tuition costs, living expenses as well as miscellaneous costs. This is because of the popularity, high competition, limited seats, university ranking and location as well as the tremendous ROI attached to the courses. Pursuing these degrees from top-tier universities and countries like the US or the UK can cost you almost a crore of rupees!   So how should you as parents plan to fund these expensive degrees? Here are a few financial planning tips that will help you take charge of your funds and help your child pursue her dream career without any stress! https://www.youtube.com/watch?v=tdwqQH0xkFw Financial planning tips Tip 1. Start early! While a corpus of Rs. 1 Cr. can sound daunting, it is achievable if you have 15 to 18 years in hand. That’s right. If you have big professional career dreams for your children, you must start saving for their education as soon as they are born. Some couples start even before the child arrives. After all, the earlier you start, the easier it will be to put the funds together.   Investment Plan for Girl Child Read More Tip 2. Define your corpus  Always work on your goals on the higher side. The cost of education is going up by almost 10-12% a year, so allow for these growth rates, and for fluctuations in currency rates. It is difficult to predict international situations two decades from now, so you must prepare for the worst, and work with higher numbers. This will save you from having to dip into your retirement savings at the time of your child’s education.   Tip 3. Do the number-crunching  This is part that most people who are uncomfortable with finance dislike. Once you have fixed the financial goal, break it down into years and months. That is the only way you will be able to build that corpus. Define how much money you will need and explore the returns options like equities that can over time give you up to 15% returns. Also, understand the risks involved. Be warned: stay away from get-rich-quick schemes, most people lose even their capital in such experiments.   Source: pixabay Tip 4: Be consistent  Remember, Rome was not built in a day. It took centuries. Luckily, you will have to work consistently only for a couple of decades. Just set up your SIPs in mutual funds, and equities, and start putting money away in Provident Funds and Bonds. While the returns on the latter are lower, these investments add stability to your portfolio. And do it month after month for the entire duration. Do not stop, do not opt out, and do not withdraw these funds for unplanned expenses like a foreign trip or a big-ticket vehicle. Stay focused on your corpus goal.   Tip 5. Go for high-return investments  The longer your investment horizon, the greater the risk appetite you can have. You can consider a 65/35 mix or even a 70/30 mix with a higher percentage being invested in equities and other high-return instruments. Do keep in mind that higher returns are usually coupled with high risk, and you must regularly balance your portfolio to avoid losing your capital.   Tip 6. Monitor your investments  All investments must be regularly monitored. Anything that is underperforming, you must get rid of and replace it with a better-performing option. But don’t try to time the market, keep your parameters clearly defined when you start your investments. This will keep you from making unnecessary mistakes in the market.   Source: pixabay Tip 7. Seek help with your investments   As the time for your child’s college admission comes closer, there are a lot of decisions you have to make to secure your child’s funds. Like turning your high-risk, high-return investment into safer options to protect your investments and corpus from any sudden market downturns, closer to the time of admission. This is an important aspect to consider as you cannot shift the time of admission. Though before taking any of these decisions, it is wise to consult a financial planner to safeguard your interests.  What we have shared here is a broad roadmap that will enable you to build the Rs. 1 Cr. corpus and fund any of the 5 expensive degrees your child may choose to pursue. While doing your initial calculations, also keep in mind that most of these courses also have entrance exams.   Preparation for these exams can start 2-3 years in advance and the coaching for the same is also expensive. You must consider having access to your funds well in time, to avoid financial stress at the last minute.   With planning, discipline, and consistency, you will be able to achieve almost any financial goal that you set for yourself. The key is to get your plans down on paper/on the computer and start working on them. So go ahead and start planning today! FAQs How can I start financial planning as a parent? Start by setting financial goals, creating a budget, and tracking expenses. Build an emergency fund and prioritize saving for your child's education and future expenses. Consider life and health insurance coverage. Consult a financial advisor for personalized guidance. How can I teach my child about money management? Introduce age-appropriate financial concepts. Encourage saving, budgeting, and goal-setting. Involve them in family financial discussions and let them earn and manage their own money. Model responsible financial behaviors and provide guidance along the way. What are some ways for me to save for my child's education? Explore education-specific investment options like Sukanya Samriddhi Yojana (SSY) for girls, 529 plans, and education loans. Start early, contribute regularly, and consider inflation. Research scholarships and grants. Consult a financial advisor for tailored strategies. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT
Should you take a loan for a child's education?

Should you take a loan for a child's education?

In the previous article, we discussed how to save your child from a student debt trap. In this article, we will discuss whether should you take a loan for a child's education. The cost of education has been steadily rising. Many parents struggle to provide for their children's educational expenses. Today, the price of an MBA ranges from Rs 10 lacs to Rs 25 lacs.   If you want your child to attend top-tier universities abroad, then the cost automatically multiplies!   Given the exorbitant price of college and the innate desire to give your child the best education possible, you may think about either saving money or borrowing money. Let us examine these two choices in more detail:   Education loan Access to education loans is simple and is given by all of India's leading financial institutions. An advantage of an education loan is that it is readily available.   You don't need to spend years building up a corpus. You can pay for your child's education in a few short weeks. Of course, the interest rate is a major drawback.   An education loan typically has an interest rate between 10% and 13%. Of course, this increases the price of schooling overall, which is already relatively high. Education loans have the drawback that your child will be responsible for paying them back once they are old and working.   Education loan puts undue pressure on your child. They may not be able to pursue a career that aligns with their interests because of the pressure of large repayments. This kind of debt may unnecessarily burden the family finances in the long run.   Thus, taking on an education loan is efficient yet the interest rates and pressure of repayment can be mentally and financially stressful for the family and your child. Let's look at investment as a means of paying for your child's education.   source: pixabay https://www.youtube.com/watch?v=tdwqQH0xkFw Investment Investment is an underutilized way of paying for your child's education. Many parents turn to loans rather than saving for their child's educational needs. Investment requires time and depends upon your child's age and the kind of education they want to pursue in the future. By utilizing a strategy for systematic investment in an equity mutual fund scheme, you can leverage the power of compounding to accumulate a sizable corpus by setting aside a manageable sum each month to pay for your child's education. There are no interest charges or payback obligations. Although you can immediately support your children's education with an education loan, it might not be the most excellent choice.   Your children will eventually be required to contribute a portion of their future income to the debt repayment. The repayment burden frequently emerges as a crucial factor when assessing employment alternatives.  The best way to save for your child's education is through a SIP. Your initial investment and monthly payments are not only considerably less, but you can take care of this significant expense relatively easily compared to taking a loan.  It is important to note that tax exemptions for education loans are allowed only for up to eight years. In contrast, the tax benefits to mutual funds apply even if you invest in equity-linked saving schemes (ELSS) that come with a lock-in period of 3 years.   Coming to the comparison, it seems that equity investments offer more advantages overall than student loans. However, you don't need to pick one; you can combine the two to achieve your objectives efficiently.   Utilizing both will ensure lower interest costs and leave money for unexpected requirements. Perhaps employ more investments rather than loans to fund your children's education. But ultimately, the choice is yours. TALK TO AN EXPERT
How to build a Bond ETFs portfolio?

How to build a Bond ETFs portfolio?

Bond ETFs are exchange-traded funds that invest exclusively in bonds. They hold a portfolio of bonds with various strategies and holding periods.   Bond ETFs are for treasuries, corporates, convertibles, floating-rate bonds, etc. Bond ETFs are analogous to stock ETFs as they are passively managed and traded in the secondary market. ETFs have become especially prominent vehicles for entering the fixed-income segment of the market in recent years.   Emerging Market ETFs Read More Investors have gradually become more comfortable with the mix of fixed-income exposure and the exchange-traded structure, which grew far more slowly than equities ETFs at first.  Investors in bond ETFs are typically attracted to a product like the Total Bond Market ETFs, which provide exposure to the entire bond market in one shot.   Treasuries dominate many ETFs that expose the investment-grade U.S. debt market, a bias that stems from the sheer scale of the U.S. government's debt obligations.   As a result, there is a concentration within a single issuer, which may not be an ideal thing to do for investors looking to build a well-balanced long-term portfolio.   Several ETFs can augment this fixed-income exposure, providing affordable and efficient access to parts of the global bond market not included in popular bond ETFs like AGG and BND. Municipal bonds, often called Munis, are also very secure and stable bonds. Municipal bonds typically include tax-free interest payments, making them attractive to investors in higher-tax bonds.   On the other hand, these bonds can be helpful in various portfolios, potentially boosting the yields on government debt. Some ETFs specialize in multiple durations and credit quality, from low-risk pre-refunded Munis to speculative high-yield municipal debt.  Build America Bonds are a unique section of the municipal bond market that can provide investors with significant actual returns while posing a low risk of default.   The Build America Program aimed to lower borrowing costs for towns seeking to complete critical capital projects. BABs are taxable bonds issued by state and local governments, with the U.S.   The Treasury is subsidizing the interest on the bonds. BABs are appealing because of their unique structure, which provides an attractive coupon for investors.  Many of the new fixed-income ETFs launched in recent years have concentrated on bond markets outside of the United States, and a variety of broad-based and precise ETFs are available to access this asset class.  Multinational Corporate Bonds give investors access to international corporate debt products, which are a force to be reckoned with.  Emerging Market Bonds are a group of instruments that provide investors with exposure to both dollar-denominated and local currency-denominated bonds.   Those seeking greater dollar diversification will generally be better suited to investing in issues denominated in foreign currencies rather than the U.S. dollar.  By employing three simple steps, we can create a bond portfolio Determine the allocation of choice in the fixed-income ETFs.  Implement a prudent trade strategy to get maximum returns through a single purchase, SIP, or any other plan that the investor deems fit.  Monitoring and assessing the portfolio regularly.  A bond portfolio can be made using the products mentioned earlier, weighting methodologies, management type, expense ratio, duration, credit quality, yield to maturity, and even returns.  The taxability of the ETF should also be kept in mind. The ETF finder is a handy tool for such combing operations! FAQs What are bond ETFs? Bond ETFs are exchange-traded funds that exclusively invest in bonds. They hold a portfolio of bonds with various strategies and holding periods. How can bond ETFs provide exposure to the bond market? Bond ETFs offer investors exposure to different types of bonds, including treasuries, corporates, convertibles, and floating-rate bonds. They provide a convenient way to enter the fixed-income segment of the market. What are some considerations when building a bond ETFs portfolio? Investors should consider diversification by not concentrating on a single issuer. They can augment exposure by investing in ETFs that cover parts of the global bond market not included in popular bond ETFs. Municipal bonds and Build America Bonds are also options to consider for stability and attractive returns. What steps are involved in creating a bond portfolio with ETFs? The steps involve determining the desired allocation in fixed-income ETFs, implementing a trading strategy (such as single purchases or systematic investment plans), and regularly monitoring and assessing the portfolio. Factors like weighting methodologies, management type, expense ratio, duration, credit quality, yield to maturity, and taxability should also be considered. The ETF finder tool can assist in this process. Consult an expert advisor to get the right plan TALK TO AN EXPERT
ETF
Are Exchange Traded Funds Different from Stocks? 

Are Exchange Traded Funds Different from Stocks? 

We have seen how exchange-traded funds differ from mutual funds. Now let us focus on the difference between ETFs and stocks since both are tradeable on the 'stock' exchange.   In today's day and age, investors have many choices to invest in to grow their wealth. Investing in stocks, bonds, mutual funds, ETFs, etc., the list is virtually endless.   The main aim of any investor is to see his investments grow; thus, each instrument brings many advantages and disadvantages.  Retail investors like you and I can choose from stocks and ETFs. Both are available on the stock market for trading. On the one hand, a stock offers ownership in a single firm; an ETF gives you a basket of securities depending upon the type of ETF you choose.   Thus, ETFs give you access to virtually any part of the financial market. ETFs are collections of stocks, bonds, commodity derivatives, and other investments traded on an exchange.  There are several differences between stocks and ETFs, but first, look at their similarities. Both the ETFs and stocks are taxable upon redemption. Both offer a steady income.   Stocks’ dividends are credited directly to the investors' accounts after tax deductions. 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.   You can choose both ETFs and stocks from various sectors. Similar to stocks, ETF trading can be done on the stock exchange.  What are the differences, then? 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.   These ETFs are managed by professional fund managers who own the underlying securities. The investors concerned about the ETFs do not own the underlying assets directly and hence give no ownership and voting rights.   On the other hand, 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.   Conversely, in the case of ETFs, investors don’t have any control over what happens to the portions of ETFs. Since ETFs have a diversified profile of assets, the risk associated with the investment reduces significantly.   Whereas in stocks, the risk attached is higher as the stock price depends entirely upon the company's performance and other external factors (outside the control of the person in question).  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.  The bottom line is that you should make every investment by studying 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 differences and similarities in mind helps in better decision-making.  FAQs How are ETFs different from stocks? ETFs are a group of securities packaged as a unit and listed on the exchange, while stocks represent ownership in a single company. ETFs offer diversification across multiple securities, while stocks offer ownership and voting rights in a specific company. Who manages ETFs and stocks? ETFs are managed by professional fund managers who own the underlying securities, relieving investors from the need to make individual buy/sell decisions. Stocks require investors to actively monitor and make decisions regarding buying, selling, or holding shares. What is the difference in risk between ETFs and stocks? ETFs typically have a more diversified profile of assets, reducing the risk associated with the investment. Stocks, on the other hand, have a higher risk as their value depends on the performance of the specific company and external factors beyond an individual's control. Which has higher liquidity, ETFs or stocks? Generally, stocks have higher liquidity than ETFs. However, in some cases, ETFs can have higher liquidity depending on factors such as popularity and trading volume. Liquidity refers to how easily an asset can be bought or sold on the market. Consult an expert advisor to get the right plan TALK TO AN EXPERT
ETF
Find out your investing options

Find out your investing options

Earlier we discussed the cookie jar investment method. In this article, we will discuss more investing options. Every investor wants to put their money into the best investment alternatives to get the best returns. Some people invest for financial security, while others meet their investment objectives.   Your investing alternatives are dependent on your risk tolerance, investment horizon, financial goals, and liquidity requirements.  In reality, risks and returns are precisely proportionate. That means the greater the risk, the greater the likelihood of returns will be. There are primarily two kinds of investment opportunities in the country.   That is financial and non-financial assets. We can further split financial assets into market-linked assets such as mutual funds, stocks, and ETFs. Some fixed-income products are bank FDs, PPFs, and Bank RDs.   Gold investments, real estate, Treasury bills, and other non-financial assets are also examples.   Let us now see which of these different investment options is suitable for India's various categories of investors.   Source: pexels Investment Options for Housewives   Housewives are often left behind in the race to make investments. However, there are many options in which a housewife can put her savings to grow her money.   Some of the best options are investments in direct equity (if they have a relative level of experience) and mutual funds. By investing in mutual funds, they can reap the benefits of professional management of their money and diversification of investment.   Investment in ETFs, bonds, and even PPFs are viable options to grow their savings over time steadily.  Investment options for salaried people  Salaried people often struggle with managing their expenses. As a salaried employee in India, you will have various investment opportunities to invest and increase your hard-earned money wisely.  Different instruments are available for investing ranging from traditional investment options like fixed deposits, recurring deposits, national pension schemes, and ULIPs to modern investment options such as investing in shares, cryptocurrencies, etc.   Investments in stocks and cryptocurrencies can provide returns as high as 10 to 15% per annum. At the same time, safer investment options include mutual investment in mutual funds like equity mutual funds and debt mutual funds.   Most risk-free investment options are bank fixed deposits, government bonds, etc. Salaried people have great potential to create wealth if they budget their expenses and investments.   Investment options for senior citizens  In old age, the thirst for returns is not as high as in youth. So, senior citizens usually need investment alternatives that mainly protect their money rather than growing it.   So, the need is for safe investment options. For elderly people over the age of 60, the Senior Citizens' Savings Scheme. It is one of the risk-free tax-saving investing choices available in the country.   It is one of the most significant investment ideas for seniors because they get a steady income in the form of a competitive interest rate of 8.6% per annum, making it a highly profitable investment option.  Another viable option is the Pradhan Mantri Vaya Vandana Yojana. It is for elderly adults aged 60 and up and provides them with a guaranteed return of 7.4% p.a.; pension income is payable monthly, quarterly, semiannually, or yearly depending upon the option selected.   Some other instruments include the Post Office Monthly Income Scheme and National Pension Scheme.   Low-risk investment options  Investments with low risk are always popular because they do not exhibit unnecessary volatility, so investors have less worry about the undertaking.   Low-risk investment options include Fixed Deposits, National Savings Certificates, Public Provident Funds, National Pension Schemes, and Gold. All these investment options are primarily fixed-income type investments – guaranteeing a particular level of return.   Gold has historically risen in value through tough times and often proves to be a hedge against inflationary pressure in the economy.   Investment options for students   As a student, you usually do not have too much money, but the biggest thing you have is time – which you can use to your advantage. Also, as a young investor, you have the option to take a significantly higher risk in terms of your investment options.   Students can invest even fundamental amounts through Systematic Investment Plans (SIPs) every month in mutual funds, index funds, and ETFs. Acquiring knowledge about bond investment will also be beneficial.   Since students have a higher risk appetite, they can also mobilize a small part of their investment amounts into cryptocurrencies after thorough research. Since there is less expendable money, choosing free brokers or low-cost brokers is essential.   Using simple rules of spending, students can save and invest small amounts over a long period and thus, grow their wealth. Investing Options - Summarised 1. Equity Shares Direct equity investment, out of all the investment options covered here, delivers the best combination of stock appreciation and dividends.   When a long-time horizon (10 years or more) is taken into account, equity markets can be somewhat unpredictable in the short run, but they provide greater inflation-adjusted returns.   You can diversify your portfolio by purchasing stocks from companies in different industries, allowing you to account for economic growth in other sectors.   Equity is the riskiest asset class due to the unpredictability of global markets and the probability of sectoral instability. When markets crash during difficult economic circumstances, there is always the risk of significant capital wipe-out.   2. Equity Mutual Funds Mutual funds that invest in equities are known as equity mutual funds. Instead of buying individual stocks in a specific industry, you can buy a mutual fund that encompasses that industry's growth. These are less hazardous due to their diversified nature.   An equities mutual fund invests more than 65 percent of its assets in the stock market (according to SEBI rules). An equity mutual fund can be active or passive.   Fund management's expertise also influences these mutual funds' performance.   3. Debt Mutual Funds Debt mutual funds, as the name implies, invest most of their assets in debt instruments. These funds are appropriate for investors with a moderate risk appetite and desire for consistent returns.   Government bonds, corporate bonds, treasury bills, and other money market instruments are also in the portfolio of debt mutual funds. Low risk does not imply that there is no risk.   Credit risk and interest rate risk are two risks that you should be aware of before investing in debt mutual funds.   4. Fixed Deposits (FD) A bank FD is safer than practically every other investment choice. With a high level of safety comes a poor rate of return.   FDs are a method to maintain your money where it is (returns are often so low that they don't even keep up with inflation), not a strategy to increase it.   Depositors have protected up to a maximum of Rs 5 lakh apiece in the event of a bank failure (under the Deposit Insurance and Credit Guarantee Corporation).   Bonds: Bonds are fixed-income securities representing a loan a borrower advanced to the investor. When governments or even listed companies want to raise money in the form of debt, they issue bonds to the public.   You can purchase these bonds in the bond market. Bonds offer fixed interest payments to the bondholders (a variable interest payment system is also there).   Bond prices and interest rates move in the opposite direction. At the time of maturity, the total principal has to be returned. There are different types of bonds, like government, corporate, and municipality bonds.    The risk of investment in bonds also arises from the possibility of potential inflation outstripping the rate of interest on the bonds.   Furthermore, when you buy bonds that are not well-rated, there remains a chance of default, wherein you might lose out on what you lent out.   5. National Pension Scheme (NPS) This investment vehicle is for people over 60. PMVVY offers a 7.4% annual guarantee.   Pension income, payable monthly, quarterly, bi-annually, or annually, with pension sums ranging from Rs 1000 to Rs 9250, is available. With a 10-year duration, the maximum investment amount is Rs 15 lakh.   The senior citizen, or their nominee in the event of the senior citizen's death, receives the maturity amount.   6. Public Provident Fund (PPF) PPF is a tax-free (interest) investment that lasts for 15 years. The government reviews the interest in PPF accounts every quarter.   A PPF account can also be opened with a monthly contribution of Rs 500. PPF is a remarkably safe investment because the interest received is covered by a national guarantee.   7. Gold Gold is often known to be a safe haven for investors. In your portfolio, gold will operate as a hedge.   In the past, gold has proven to be a winner when the economy has been in the doldrums. Gold is an attractive investment in the long run because of its rising price.   Digital gold, sovereign gold bonds, gold ETFs, and physical gold are options for purchasing gold. It's also a highly liquid asset to own. FAQs What are some low-risk investment options? Some low-risk investment options include Fixed Deposits, National Savings Certificates, Public Provident Funds, National Pension Schemes, and Gold. These options offer a relatively stable return on investment and are less volatile. Which investment options are suitable for senior citizens? Senior citizens can consider investment options such as the Senior Citizens' Savings Scheme, Pradhan Mantri Vaya Vandana Yojana, Post Office Monthly Income Scheme, and National Pension Scheme. These options provide steady income and are designed to protect their money. What investment options are suitable for salaried individuals? Salaried individuals have a range of investment options, including traditional options like fixed deposits, recurring deposits, national pension schemes, and ULIPs. They can also consider investing in stocks, cryptocurrencies, and mutual funds like equity and debt funds. What are the recommended investment options for students? Students with a higher risk appetite can consider investing in Systematic Investment Plans (SIPs) in mutual funds, index funds, and ETFs. They can also explore bond investments and allocate a small portion of their investment amount to cryptocurrencies. Using low-cost or free brokers is recommended for students with limited funds. TALK TO AN EXPERT
What are emerging market ETF?

What are emerging market ETF?

Before moving to what emerging market ETF is, let's quickly learn what emerging markets are, their characteristics, and why they should be acknowledged whilst making a portfolio.  Emerging markets are countries that are increasing their manufacturing capabilities. They are moving away from agriculture and raw material exports, which were once their main sources of income.  Governments in emerging countries want to improve the lives of their citizens. They are fast industrializing and transitioning to a mixed economy or free market. Brazil, China, India, Russia, etc., are some examples of emerging economies.  Characteristics of emerging economies What does this mean?  There are numerous ways to profit from emerging markets' high growth rates and prospects. The best option is to invest in a fund that focuses on emerging markets.   Many funds either track the MSCI Index or strive to outperform it. This helps save a load of effort. It is unnecessary to conduct extensive research into foreign firms and economic policies.   It also lowers risk by distributing investments across various emerging markets rather than just one.  However, emerging markets are not all equal in terms of investment potential. Since the global financial crisis of 2008, some countries have used rising commodity prices to boost their economies.   They did not put money into infrastructure. Instead, surplus funds are used to fund subsidies and new government employees. As a result, their economies grew swiftly, their citizens bought a lot of imported goods, and inflation became a problem immediately.  Brazil, Hungary, Malaysia, Russia, South Africa, Turkey, and Vietnam. Governments can encourage foreign direct investment by keeping interest rates low.  It was well worth it, even if it did assist in raising inflation. The countries received tremendous economic growth in exchange.  Emerging market funds are mutual funds or exchange-traded funds that invest in publicly traded companies based in an emerging country or region.   Funds might target specific geographic areas or invest in a single country. While an emerging market fund does not have to invest solely in developing markets, it should have most of its holdings in that sector.   The remaining holdings could be more extensive domestic holdings that make capital investments in the economy's development. As Hyundai has made significant investments in plants in India, an emerging market fund investing in India may also hold Hyundai stocks.  Emerging Markets ETFs have $330.14 billion in assets under management, with 233 ETFs trading on US exchanges. The cost-to-income ratio is 0.58 percent on average.   With $79.22 billion in assets, the Vanguard FTSE Emerging Markets ETF VWO is the largest Emerging Markets ETF. MEXX, the best-performing Emerging Markets ETF in the previous year, returned 80.89 percent.   The VanEck Digital India ETF DGIN was the most recent ETF to launch on February 15, 2022.  Top emerging market ETF issuers by AUM.  IssuerAUM in $ billionNumber of fundsBlackrock Financial Management112.4014State Street7.124Invesco1.665Charles Schwab13.892First Trust0.645 Top and Bottom performers in the category of ETFs Top ETF Performers according to etf.com  TickerFund NameTrailing 30-day price TR changeYANGDirexion Daily FTSE China Bear 3X Shares28.44%FXPProShares UltraShort FTSE China 5018.58%EDZDirexion Daily MSCI Emerging Markets Bear 3x Shares17.37%CHIEGlobal X MSCI China Energy ETF15.04%BRZUDirexion Daily MSCI Brazil Bull 2X Shares13.19% Bottom ETF Performers according to etf.com TickerFund NameTrailing 30-day price TR changeRUSLDirexion Daily Russia Bull 2X Shares-85.12%RSXVanEck Russia ETF-70.31%FLRUFranklin FTSE Russia ETF-59.40%RSXJVanEck Russia Small-Cap ETF-44.38%YINNDirexion Daily FTSE China Bull 3X Shares-24.81% Emerging markets offer investors a great way to diversify their portfolios without sacrificing growth.   While the investments are more volatile, the underlying firm frequently enjoys significant growth as the new market grows. Before investing in emerging economies, investors should do their homework. FAQs What are emerging market ETFs? Emerging market ETFs are mutual funds or exchange-traded funds that invest in publicly traded companies based in emerging countries or regions. These funds typically target specific geographic areas or invest in a single country, with most of their holdings in developing markets. Why should investors consider investing in emerging market ETFs? Investing in emerging market ETFs offers the opportunity to diversify portfolios and participate in the high growth rates of emerging economies. These ETFs distribute investments across various emerging markets, reducing the risk associated with investing in a single country. How do emerging market ETFs differ from other funds? Emerging market ETFs focus on investing in companies based in emerging economies, whereas other funds may have a broader scope. These ETFs allow investors to gain exposure to the growth potential of specific regions or countries within the emerging market sector. What are some top-performing and bottom-performing emerging market ETFs? According to etf.com, some top-performing emerging market ETFs include YANG, FXP, EDZ, CHIE, and BRZU, with notable price increases over a trailing 30-day period. Conversely, some bottom-performing ETFs in this category include RUSL, RSX, FLRU, RSXJ, and YINN, with notable price decreases over the same period. Note: The specific performance of ETFs may vary, and investors should conduct thorough research before making investment decisions in emerging market ETFs. Consult an expert advisor to get the right plan TALK TO AN EXPERT
ETF
whatsapp