Tuesday, November 22, 2011

Mirroring the indices of the markets through ETFs

ETFs Offer Great Returns In Investment Portfolios
One of the most profitable investments in the current market conditions includes ETFs. Exchange- Traded Fund (ETF) refers to an index, commodity or an index fund which can be traded like a stock on an exchange. It is listed on a stock exchange and trades intraday, and can be described as, a Mutual Fund traded like a stock. However, there are several important differences between mutual funds and ETFs.

ETFs tend to follow indexes like the S&P 500, unlike mutual funds, which try to beat them. For example, if S&P 500 trades fifteen percent lower, the ETF that follows will decline by fifteen percent too. Likewise, if S&P 500 trades ten percent higher, the ETF that follows will trade ten percent higher.

The concept of investing in ETFs is new as compared to mutual fund investments. This new investment arena provides great opportunities as currently there are very few investors with the necessary skill and knowledge. So, if you are one of the early birds to invest in ETFs, you have a good chance to reap great returns.

If you wish to find more details about ETFs, you can check the websites of the issuers of those ETFs. Kotak Mahindra group is one of the issuers of ETFs.

Kotak Securities , one of the oldest and largest stock brokers in the industry, helps in managing investment portfolios to make profitable investments. With regards to ETF, it offers Kotak Gold ETF , with an investment objective to generate returns that are in line with the returns on investment in physical gold.

ETF is a great means of investment and you should certainly seek this opportunity because the market is currently low, and expected to recover in the next few years. If you invest now, you might make amazing profits when the market is booming a few years down the line.

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