National Securities Depository Limited · BSE:NSDL
National Securities Depository — Investor Presentation (May 2022)
27 slides from National Securities Depository's investor presentation, May 9, 2022
Slide 1: Introduction to Exchange Traded Funds (ETFs)
Introduction to Exchange Traded Funds (ETFs)
Slide 2: Disclaimer
Disclaimer Information contained in this presentation is as on May 09, 2022. The information contained in this presentation is only for Educational and Awareness Purposes related to securities market . This presentation is only for Educational and Investor Awareness Programs and shall not be u
Slide 3: Flow of Presentation
Flow of Presentation 1. What are ETFs? - Overview; 2. Advantages of investing in ETFs; 3. Difference between ETFs, Stocks & MFs; 4. Types of ETFs; 5. How to apply for ETFs – during NFO; 6. How to invest in ETFs at SEs (Post closure of NFO); 7. iNAV and Market / Traded price of ETF; 8. Redemption of
Slide 4: What are ETFs? Overview
What are ETFs? Overview ETF are like diversified mutual funds that are listed and traded on the stock exchange Operationally are like Mutual Fund Trade like Shares 4
Slide 5: What are ETFs? Overview
What are ETFs? Overview Funds collected by ETF are invested in securities (debt/equity)/assets (gold/silver) which forms part of an Index/Asset Class. ETFs try to follow or replicate the performance of benchmark index Objective of ETF is to track the returns of a particular Index, viz. Nifty 5
Slide 6: What are ETFs? Overview
What are ETFs? Overview Investment style of ETF units is called Passive Investing. What is Active Investing Vs. Passive Investing. Active Investing - Fund manager invest and tracks returns of the selected securities (Stock picking based on analysis and judgement). Main purpose of fund is t
Slide 7: Investing in ETFs
Investing in ETFs Like a fund… Like a stock… • Constructed to track an index • Trading flexibility intraday on the exchange • Open ended mutual fund • Lower expense ratio generally • Real time price as compared to an active fund • Put limit orders • Lower turnover • Minimum trading lot is just 1
Slide 8: Advantages of ETFs
Advantages of ETFs Investors in ETFs can benefit both the flexibility of a stock as well as the diversification 8
Slide 9: Difference between ETFs, Stocks & Mutual Funds
Difference between ETFs, Stocks & Mutual Funds Functionality ETFs Stocks MF Units Real time trading & pricing throughout market hours Can be purchased through brokers and /or online trading a/c Can be traded real time on the Exchange platform Is Diversification possible with a single unit
Slide 10: Types of ETFs
Types of ETFs Equity / Index ETFs Gold / Silver ETFs Global Debt ETFs Equity ETFs 10
Slide 11: Equity ETFs
Equity ETFs Equity ETFs are exchange-traded funds that seek to replicate and track a benchmark index like SENSEX, NIFTY, etc., as closely as possible; Equity ETFs offers instant diversification in a tax efficient and cost effective investment. The price fluctuations in Equity ETFs are directly
Slide 12: Gold ETFs
Gold ETFs Gold ETF aims to track the physical gold price. Gold ETFs are units representing physical gold. Gold ETFs – Having flexibility of stock investment and the simplicity of gold investments. Buying an Gold ETFs means an Investor is purchasing Gold in an electronic form. 12
Slide 13: Debt ETFs & Global Equity ETFs
Debt ETFs & Global Equity ETFs Debt ETF - Debt ETFs invest according to specific Debt Index. Debt ETFs also tracks different fixed income securities depending on an underlying fixed income index like Nifty 8-13 years G-Sec Index or NIFTY 4-8 years G-Sec Index. Global Equity ETF - Allow the
Slide 14: How to invest in ETFs?
How to invest in ETFs? Investor need to have three accounts Trading Demat Bank Account Account Account with Brokers with DPs 14
Slide 15: How to invest in ETFs?
How to invest in ETFs? NFO On going offer Buy/Sell Investor Stock Exchanges Buy/Sell Subscription 15
Slide 16: How to invest in ETFs
How to invest in ETFs During New Fund Offer (NFO) - ₹ 500/- or such other minimum amount Post Closure of Fund Offer, Ongoing Basis - On the Exchange : 1 Unit & in multiples thereof Directly with Fund : Large investors can directly purchase the units from the AMC in stead of buying from exc
Slide 17: How to apply for ETFs-during NFO
How to apply for ETFs-during NFO How to Apply: ETF Units available only in dematerialized (electronic) mode. Beneficiary account with a Depository Participant of NSDL/CDSL. Following details to be indicated in the application form : Depository Participant’s name, Depository Participant’s
Slide 18: How to apply for ETFs-during NFO
How to apply for ETFs-during NFO Allotment: Intimation of allotment sent within five days from date of allotment. ETF Units are credited in DP account. Listing: Listing of ETF units on the Stock Exchanges. within 5 working days from the date of allotment. 18
Slide 19: How to invest in ETFs at Stock Exchange (Post close of NFO)
How to invest in ETFs at Stock Exchange (Post close of NFO) Buy / Sell ETF units at stock exchange - Similar to buy / sell of shares in Secondary market. Investor need to place buy / sell order with stock broker. Investors can buy or sell at stock exchange post listing of ETF units . Minim
Slide 20: iNAV and Market /Traded price of ETF
iNAV and Market /Traded price of ETF Net Asset Value (NAV) of ETF - Value of each unit of ETF calculated by AMC of ETF. Market Price / Traded price of ETF - Price at which ETF units brought / sold at stock exchange. Price of ETF changes, based on market demand or supply of ETF. o Price inc
Slide 21: iNAV and Market /Traded price of ETF
iNAV and Market /Traded price of ETF Real Time Pricing Live Quotes on Exchange site Real Time NAV on AMC site 21
Slide 22: Redemption of ETF Units by AMC
Redemption of ETF Units by AMC In Normal case, Investor need to sell ETF units at Exchange through trading account. However, investors can directly approach AMC for redemption of ETF units, subject to the following conditions: a) Traded price of the ETF units - is at discount of more than 3% t
Slide 23: Buying ETFs directly from AMC (Bulk deal)
Buying ETFs directly from AMC (Bulk deal) Applicable to Investors having large funds: Investors willing to buy ETFs in bulk may deal with AMCs directly. This facility is not suitable for small investors. Creation of ETF units is defined for every ETF and displayed on the AMC website. Creatio
Slide 24: Tax on ETF Trades
Tax on ETF Trades Tax Structure on Capital Gains on Equity ETFs: Short-term capital gains are taxed at 15% along with surcharge and other Cesses as applicable. For all long-term capital gains, an amount of up to ₹1 lakh is tax- deductible, and a tax of 10% would be levied on any amount greater
Slide 25: Points to Ponder before investing
Points to Ponder before investing Underlying Index: Investors need to first decide on the market in which they wish to invest, i.e. Benchmark Index as a whole or a Specific Sectoral Index Gold/ Silver, etc. iNAV: Before buying or selling 1 decision, check iNAV of ETF units. Total Expense Ratio
Slide 26: Additional Information
Additional Information For further information, you may visit the following web-sites and Mobile App: w w w. s e b i . g o v. i n / h t t p s : / / i n ve s t o r. s e b i . g o v. i n / Saa₹thi App For Grievance Redressal, you may visit following website: w w w. s c o r e s . g o v. i n
Slide 27: THANK YOU
THANK YOU 27
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