India’s homegrown digital financial services platform Paytm today announced that its wholly-owned subsidiary ‘Paytm Money’ has launched Exchange-Traded Funds (ETFs) on its platform, post-approval from the Securities and Exchange Board of India (SEBI). These are passive funds that are listed on NSE /BSE and traded like regular equity shares proving the merits of mutual funds along with the return potential of stocks. With this inclusion, the company becomes a comprehensive platform wherein investors from across all financial and knowledge backgrounds can conveniently access ETFs and start investment journey to accumulate wealth for their various financial goals.
Paytm Money believes that ETF is an essential part of an investor’s portfolio and all Indians must invest in it. Therefore, the company has made it convenient for new investors by facilitating ETF investments for as low as Rs. 16 in Equity, Rs. 44 in Gold and Rs. 120 for NIFTY. The platform’s interactive and easy to use interface helps to track the price changes in the preferred ETFs along with the flexibility to set a price alert. It also updates the live prices of an ETF and empowers investors to place a sell order during the open market hours and receive the money directly in their bank account. Advanced investors can even execute intra day trades in ETF and the simple stop loss/target price orders allow users to automate their risk management. The investor also gets the flexibility to invest via both the Paytm Money app and the Paytm Money website.
Investments in ETFs through Paytm Money is relevant for first-time investors who may initiate an investment with a simple nominal amount. As opposed to actively managed mutual funds, ETFs are a relatively low-cost option since passive fund management results in the funds having a lower expense ratio. For investors putting in smaller amounts, the benefit of compounding, coupled with low fund management costs would enable them to boost the portfolio returns. The app is also tailored to serve as a good long term strategy helping experienced investors diversify their portfolio on a broad-based level. It allows them to raise exposure to both the market leaders of today as well as the prominent sectors poised to grow in future.
In India, there are 69 different kinds of ETFs available across the index, gold, equity and debt categories with top-performing ETFs such as Aditya Birla Sun Life Gold ETF, Nippon India Nv20 ETF, LIC G-Sec Long Term ETF among others. They have delivered returns to the tune of 18.67%, 10.29% and 8.43%.