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An exchange-traded fund is an investment option that blends the characteristics of mutual funds and stocks.
It’s a pooled investment you can trade on the stock exchange. (Representative Image)
What are ETFs?
ETFs, or Exchange-Traded Funds, are investment options that include a mix of assets like stocks, bonds, or commodities. Most ETFs follow an index, sector, or specific asset. When you buy an ETF, you’re investing in all the items it holds.
For example, a Nifty 50 ETF gives you exposure to all 50 companies in the Nifty 50 index. This means you get instant diversification with just one investment.
ETFs are traded on the stock exchange like regular shares, and their prices change based on the value of the assets they hold.
What is an ETF Calculator?
An ETF calculator helps you estimate how much your ETF investment can grow over time. It uses your investment amount, expected annual return, and time to show future value using compound interest.
ETF Calculator: How it Works
You enter three things:
– How much do you want to invest (lump sum or monthly SIP)
– The expected yearly return (like 7 per cent)
– How long do you plan to invest (in years)
The calculator then shows how your money could grow. For example, if you invest Rs 10,000 for 10 years at a 7 per cent annual return, it could grow to around Rs 19,672.
ETF Calculator: Why Use It?
– See how much your ETF investment might grow over time
– Compare different ETFs based on return expectations
– Plan for goals like retirement
– Test different scenarios (high, low, or average returns).
It’s a simple tool to help you make better investment decisions.
Benefits of Using an ETF Calculator
Helps estimate how your ETF investment can grow over time through compounding.
Allows you to test different scenarios by changing the investment amount, return rate, and time.
Let’s compare expected returns from different ETFs to choose the most suitable one.
Useful for retirement planning by showing how much you need to invest to reach your goal.
Shows the future value of SIPs, helping with goal-based financial planning.
Highlights how staying invested longer can boost returns through compounding.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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