Analysis Of Exchange Traded Funds & Mutual Funds

Vol. 7 No. 3

Year: 2013

 
Issue: Dec-Feb

Title : Analysis Of Exchange Traded Funds & Mutual Funds 

  

Author Name : Dr Koti Reddy Tamma 

  

Synopsis :

The  paper  examines mechanism of functioning of Exchange Traded Funds (ETFs) and its growth in India. It also includes identification of potential new ETFs which can be launched to cater the need of Indian investor to effectively diversify their portfolios at minimal cost. To analyze performance characteristics of ETFs and their comparison with Index Mutual Funds, a sample of 6 ETFs tracking different indices and 5 Index Mutual funds tracking the same S&P CNX Nifty Index, was studies based on past 3 years daily data. Performance characteristic like tracking error was calculated by three methods. Average per centage  yearly return was also calculated. Findings and conclusions show that ETFs are better in tracking their respective benchmarks as compared to Index Mutual Funds.