Mutual Funds Blog | Dr Savita Satav

Smart beta ETFs or Smart beta Funds are rule based Exchange Traded Funds (ETFs) which have the characteristics of passive as well as active funds. They invest in the constituents of Indices ( all or few) but in a different way. They invest in smart beta or Strategy Indices.

An Index Fund is a Mutual Fund which invests in a basket of securities / constituents of the Index which they track. For example the Mutual Fund which is based on Nifty 50 Index will invest in all the constituents of the Nifty 50 Index in the same proportion as the Index.

Equity Schemes, Debt Schemes, Hybrid Schemes, Other schemes like ETFs, Fund of Funds, Index Funds and Solution Oriented Schemes like Retirement Funds.

Inflation Risk, Price Risk, Market Risk, Liquidity Risk, Credit Risk, Interest rate Risk and Regulatory Risk

The Mutual Fund Riskometer helps investors understand the risk associated with Investment in various types of Mutual Fund Schemes so that investors can take informed decisions on their investments. The risk to the principal sum invested in the scheme is shown in the Riskometer. The Riskometer divides Risks at five levels – Low Risk, Moderately Low Risk, Moderate Risk, Moderately High Risk and High Risk.

Exchange Traded Fund (ETF) is a security that invests in and tracks a basket of shares like an Index, or a commodity like gold, silver or bonds. ETFs are listed and traded on a stock exchange. Index based ETFs are a basket of securities which trade like a single stock on the stock exchange. They invest in a basket of stocks that comprise the index they track.

A Gold ETF or a Gold Exchange traded fund is a security which invests in physical gold of 99.5 % purity and tracks the domestic price of physical Gold. The price of Gold ETF is on a real time basis. Gold ETFs are listed and traded on the Stock Exchange (NSE, BSE ) like any other stock throughout the day during market hours.

In case of Equity Funds where the holding period is less than one year it is charged to tax as Short Term Capital Gains at 15%. In case of Equity Mutual Funds where the holding period is one year or more it is charged to tax as Long Term Capital Gains at 10%.