- Date : 21/09/2022
- Read: 5 mins
With the advent of technology, it has become easy to access different international markets from anywhere in the world. This ease of access has contributed to the rising popularity of International ETF investments in India. With the exceptional benefits and variety of options, ETF investments are on the rise. Read on to know more about ETF and the International ETF which an investor should look out for!
The rise in investors across India can be attributed to the development in technology and fund houses. With multiple investment options such as Bonds, Stocks, Gold, Mutual funds, and ETFs Indian investors are always on the lookout for the best opportunities to make gains.
Also Read: How to invest in ETF for first timers?
What is an Exchange-Traded Fund?
Exchange-Traded fund is a pool of multiple securities which can be purchased and regulated on a stock exchange. It can consist of bonds, stocks, gold, or any other financial commodity. ETF is an opportunity for investors to diversify their portfolios without spending time investing in different financial commodities across multiple exchanges.
Exchange-Traded Funds (ETFs) are attempting to cut investing choices that bring together the advantages of mutual funds and equities. In India, ETFs were first pioneered by Benchmark Mutual Fund. The Nifty Benchmark Exchange-Traded Scheme (Nifty BeES), which was introduced by Benchmark Mutual Fund in 2001, was the nation's first ETF. Due to the numerous advantages that ETFs have over actively-managed mutual funds over the years, ETFs have acquired considerable investor acceptance in India. As per the recent regulations of SEBI (Securities and Exchange Board of India), the total investments which can be made by the investors in India amounts to USD 1 billion (approximately Rupees 7500 crores). Even though this restriction has limited the industry it has not reduced the popularity of International ETF among the investors in India.
How to invest in ETF" explained by ET Money to understand investing in ETF.
Benefits of investing in International ETF
ETFs have become a popular alternative to mutual funds in the country. For investors looking to invest in the international market, ETF is the way to go. Let us understand the various benefits of investing in an International ETF.
1. ETF promotes diversification
ETF consists of multiple financial securities across different industries and countries which allows the investors to diversify their portfolios.
2. ETF has high liquidity
Even though ETF has a pool of financial securities it is easy to trade and can be purchased or sold like a stock.
3. ETF can save you a lot of money
With low fees for management, fewer service fees, reduced load fees, and a low expense ratio, ETF can be a money-saver for investors.
4. ETF is time efficient
The investor can purchase a pool of securities together instead of going for each security distinctly which saves time and effort.
Also Read: 6 reasons which make ETF excellent investments
Best International ETF to invest in 2022 for Indian investors
Financial traders in India can invest in ETFs through Fund of funds (F0F), these are superfunds that allow the trader to invest in multiple securities at once. Indian investors can invest in ETF in the international market with the following Fund of Funds (FOF)
1. Aditya Birla Sun Life NASDAQ 100 FOF
The FOF comprises the top 100 non-financial companies in the world which allow diversification across multiple industries for the investor. The FOF provided a CAGR of 25 percent in the year 2021.
2. Invesco India – Invesco EQQQ NASDAQ-100 ETF FoF
With an expense ratio of 0.15 percent, the FOF is one of the best options for investment. It has multiple options for investment in companies belonging to the financial sector. The average return for 5 years is 9.02 percent for the FOF.
3. Navi Nasdaq 100 Fund of Fund
With the top 100 non-financial companies in the US, this FOF is an opportunity for investors looking to invest in the international market. The FOF comprises the world’s largest tech companies and has had a CAGR of 26.1 percent for 10 years.
4. Kotak Nasdaq 100 FOF
For investors looking to invest in global companies such as Facebook, Amazon, PepsiCo, Tesla, and many others, this FOF is the correct choice. Paving a way for the international market for the investors this FOF is a long-term investment.
5. Navi US Total Stock Market Fund of Fund
The FOF represents all of the US equity markets where investments can be made across 4000 companies. This ETF is the only one to provide investors with a way to invest in Vanguard.
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As the international markets continue to expand ETF will become prominent for investors looking to expand their portfolios. Less-time consumption and access to international markets will drive the demand for ETFs. Diversify your portfolio, save money and earn profits by investing in the best international ETF in India.
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.