ETF

When it comes to investing in equity markets, investors tend to prefer investing through mutual funds. Investors can invest in a wide range of mutual fund schemes, suiting their investment horizon, and risk appetite. One such investment option is the Exchange Traded Funds which is populary know as ETFs. Equity ETFs tracks an underlying equity index and the main difference between traditional mutual fund schemes and ETF is, ETFs can be traded on the stock exchange. 

Not all asset classes have been winners consistently in the investing world since different asset classes may react differently to macroeconomic events. As such, asset classes like equities, debt, gold, real estate etc., tend to perform in their respective economic cycles.

While equities may perform better during periods of high economic growth, debt may perform better during periods of decreasing interest rate scenario. Similarly, gold may be a better performer when asset classes like equity and debt seem volatile and uncertain, as gold is considered a safer investment option.

When investing in mutual funds, one must choose the mutual fund schemes that best suit their financial goals and risk appetite. In addition, selecting the equity investments basis their market capitalisation is one of the selection criteria, as different market cap segments carry different risk-reward trade-offs.

When it comes to mutual fund investing, investors can choose between actively and passively managed funds. While both aim to provide market-linked returns to the investors, these funds tend to differ on many parameters.

With a wide range of mutual fund schemes are available for investments, it becomes imperative for the investors to carefully review the available options and then select the mutual fund schemes best suiting the risk profile, financial goals, and investment horizon. Different mutual fund schemes may be suitable for financial goals with varied investment horizons.

Debt funds are one of the five broad categories of mutual funds allowed by the Securities & Exchange Board of India (SEBI). Debt funds predominantly invest in debt securities and bonds. Such securities tend to provide income primarily through interest income from such securities.