Like mutual funds, ETFs pool money from multiple investors and invest in a diversified basket of assets such as equities, bonds, or commodities. They are designed to track the performance of a specific index, sector, or asset class, making them an efficient and convenient investment option.
Let’s explore why ETFs can be a better alternative to mutual funds, and why investing in US ETFs may be more advantageous than putting money into Indian mutual funds with US exposure.
While mutual funds and ETFs are both good choices for investors looking to grow their wealth while managing risk, ETFs can often outperform mutual funds in a few aspects. This is due to the fundamental differences between the two. While a significant portion of mutual funds are actively managed, ETFs are usually managed passively. This results in the expense ratios of ETFs being significantly lower—often just one-tenth that of mutual funds.
Have a look at the table below to better understand the advantages US-based ETFs have over Indian mutual funds.
Investing in US ETFs is not very different from investing in those based in India. Platforms like Appreciate trading app have made it convenient for Indian investors to access US ETFs and stocks without having to navigate complex formalities. On top of these benefits, when you invest with such apps, you enjoy zero fees on withdrawals, AMC, and remittance, ensuring that all your money goes directly into your investments.
Not only is investing in US ETFs straightforward, but it also offers a wider range of options. The US market provides choices, including funds based on strategies, themes, and sectors, allowing investors to tailor their portfolios to their specific goals and interests, making the investment experience more personalized.
Here are some top-performing US ETFs that show the range of opportunities available in the US market.
Apart from maturity of the market, the US is at the forefront of global innovation, giving rise to various advanced industries emerging in the world, such as Artificial Intelligence, Quantum Computing, Machine Learning, Semiconductors, and Robotics. New industries are not yet fully mature in India, and most companies that are involved in them are at an early stage.
For example, ETFs like ROBO Global Robotics & Automation Index ETF (ROBO) which tracks the performance of companies engaged in robotics, automation, and AI, allow investors to allocate their funds to companies involved in innovative and revolutionary sectors.
Investing in such ETFs helps investors future-proof their portfolios while offering the potential for long-term growth and returns.
Investing in US ETFs opens up a range of opportunities for Indian investors, not only to grow their portfolios but also to be a part of global growth stories. However, making investment decisions solely based on these factors may negatively impact your portfolio. However, whether it’s stocks, mutual funds, or ETFs, any investment—anywhere in the world—requires a proper understanding of the markets and thorough research into such assets.
This is where investment platforms like Appreciate stand out. While finding ETFs in just a few clicks is a given, the app also enables investors to view the component companies within each ETF, their performance, and the latest news and events related to them. This makes investing in ETFs not only easier but also more informed and hassle-free. You can download the Appreciate trading app and start investing today in ETFs or stocks of your choice.
(This article is part of DMCL Consumer Connect Initiative, a paid publication programme. DMCL claims no editorial involvement and assumes no responsibility, liability or claims for any errors or omissions in the content of the article. The DMCL Editorial team is not responsible for this content.)
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US ETFs vs Mutual Funds with US exposure: Which is best for you?
