Concept

♤ Exchange Traded Funds (ETFs) are mutual funds listed and traded on stock exchanges like shares. Index ETFs are created by institutional investors swapping shares in an index basket, for units in the fund.

♤ Usually, ETFs are passive funds where the fund manager doesn’t select stocks on your behalf. Instead, the ETF simply copies an index and endeavours to accurately reflect its performance. In an ETF, one can buy and sell units at prevailing market price on a real time basis during market hours.

♤ Lately, the Government has latched upon the Exchange Traded Funds (ETFs) route to disinvest its holdings in public sector companies rather than sell them on a piecemeal basis in the market. One such vehicle is the Bharat 22 ETF, a fund which houses 22 public sector companies.