Nifty ETF is new way of holding nifty future in your demat account, now no need of rolling over positions at time of expiry. Nifty ETF has been one of the smartest ways of investment in nifty index for long term. Let us see advantages and disadvantages over nifty future:
Advantages of Nifty ETF:
1. Nifty ETF can be held on your demat, it is just same as you take delivery of shares.
2. No need to roll over your positions on F&O expiry, as you have nifty ETF on your demat account instead of trading account.
3. No need of M2M (mark to market) settlement, as you are holding nifty ETF on demat account for delivery.
4. Nifty ETF can be used as margin for buying shares for trading, this facility is provided by many stock brokers.
Disadvantages of Nifty ETF:
1. Nifty ETF requires full margin i.e. total value of contract at time of placing orders. Whereas nifty future need as low as 10% margin requirement of total contract value.
2. Fund expense is also applied and this can be around 2%.
3. Liquidity in nifty ETF is much lower as compared to nifty future.
No comments:
Post a Comment