Invest in ETFs with Pocketful

What is an ETF?

An exchange-traded fund (ETF) is a passive investment option that primarily invests money on behalf of investors into a basket of equities, commodities, or other assets. As most of them track a specific index and are passively managed, their returns are generally similar to the indices. 

ETFs are traded on a stock exchange like any other stock. Therefore, to buy and sell them, one must have a demat and trading account.

Types of ETFs

There are six types of ETFs in India, details of which are as follows:

1. Equity ETF: These ETFs invest in a basket of stocks of a particular index.
2. Debt ETF: These ETFs invest in a basket of debt securities.
3. Commodity ETF: This category of ETF invests in particular commodities such as gold, silver, etc.
4. International ETFs: These ETFs invest in the equity markets of foreign countries.
5. Thematic or Sectoral: When an ETF invests its money in equities associated with a particular sector or theme, it is known as a thematic or sectoral ETF.
6. Smart Beta ETF: The smart beta ETFs primarily invest their money according to different strategies, such as picking indices with low volatility, high-momentum or value characteristics.

Benefits of Investing in ETFs

The significance of investing in ETFs is as follows:

• Cost Efficient: Investing in ETFs is very cost-effective as they generally have a lower expense ratio than actively managed funds.
• Transparency: ETFs provide transparency as their performance can be easily judged by comparing it to the index or commodity they track. Moreover, the ETFs invest according to a specific mandate and their holding information is available publicly; therefore, an investor is fully aware of where their funds are invested.
• Diversification: You can easily diversify their investment portfolio using an ETF as they invest your money in a basket of securities.
• Liquidity: ETFs are traded on the stock exchange and therefore provide liquidity to investors.

5 Reasons to Invest in ETFs with Pocketful

There are various reasons why one should invest in ETFs with Pocketful; a few of such reasons are mentioned below:

1. No Brokerage: Pocketful allows investors to invest in ETFs without paying any brokerage as it offers zero brokerage on delivery trades.
2. Easy Execution: Pocketful mobile application has a user-friendly interface, allowing you to execute orders in just one click.
3. Pledging of Shares: You can easily pledge ETFs through the Pocketful application and get margin.
4. Advanced Technical Tools: Pocketful offers technical tools that can help you analyze the market trends better and make an informed investment decision.
5. Zero Account Opening Charges: Pocketful offers you to open your demat account without paying any charges on it.