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What Are ETF's? Introduction To ETF's! [Basics!] (#38)

 


What Does ETF's Stands For & It's Meaning?

ETF(s) stands for Exchange Traded Fund.... & as the name suggests.... ETF is a Fund Traded On An Exchange!


How Does ETF's Works? Basic Explanation!

ETF's are basically a basket or a pack of multiple & different types of Assets.... like— Mutual Funds, Stocks, Debentures, Bonds, etc., etc.! Which means buying 1 ETF means that you are investing in so many things all at once.


But now, there's one question you may have.... that, why would someone buy an ETF.... when they can buy.... stocks, bonds & all.... individually....

So,

Are There Any Benefits Of Investing In ETF's?

& the answer is YES! Here's why....

So, talking 'bout the benefits....

First thing is DIVERSIFICATION.... So instead of finding multiple places to invest in.... you can get a ready-made basket, ALL AT ONCE!

& talking 'bout the second benefit.... it is that you won't have to pay any extra charges.... — you know like whenever we purchase a Share then we are charged some Transaction Charges.... & if we'll buy stocks/shares of different companies individually then the Transaction Charges are gonna sky rocket....

So, ETF's may have Transaction Charges, too but ofcourse, they won't be that high.... as in comparison to.... IF YOU BUY THE SAME "ASSETS" INDIVIDUALLY!


& So that's how things BASICALLY WORKS IN ETF's!




Ok! Well.... so that was all 'bout the "BASICS Of ETF's"!


You may COMMENT down below.... if you've got anything to say!


Thanks For Reading!

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