Comments on: Exchange-traded funds (ETF)

By: Karthik Rangappa

Karthik Rangappa — Thu, 02 Jan 2025 04:17:59 +0000

Thanks, glad you liked it. YOu can check this as well – https://www.youtube.com/watch?v=DeGzj9BJmcY

By: Vinod Kurangia

Vinod Kurangia — Wed, 01 Jan 2025 18:56:10 +0000

One of the most comprehensive precise material for ETF in Indian Market context. You have immensely helped many, like me in this topic. Thanks a Ton sir.

By: Karthik Rangappa

Karthik Rangappa — Mon, 30 Dec 2024 04:00:48 +0000

In reply to neha1101. This is no longer the norm, I think the author stated this to showcase the mispricing anomaly. Let me check though.

By: neha1101

neha1101 — Sun, 29 Dec 2024 16:48:40 +0000

Hi
The above article attracted my attention as someone madeq a quote on a para from the above.

Quote
Perhaps, the best example of this would be the Motilal Oswal NASDAQ 100 (N100). During 2017-2018, the ETF was trading at a huge premium to the NAV. The premiums were as high as 20%+. This was probably because the market makers weren’t active in providing liquidity. Value Research allows you to compare the NAV and price, here’s a chart, notice the huge difference between the NAV and the price.

Someone could have taken advantage of this premium by going to Motilal AMC and asking them to create units, which happens at the NAV and sell them at the market price on the exchange. The difference would’ve been the profit.
Unquote

Is this the right example to give when someone new is reading about ETF. The NASDAQ 100 at a premium is a RBI issue where they put a restriction on limits. This forced the respective AMC not to issue new units. THIS IS A EXception than the rule. No one could take advantage of the premium by going to the AMC direct as the AMC would not be able to create the units. This is not a correct statement. People may think this is the norm for all ETF when in fact it is not.

Even now the same ETF is traded and those who own the ETF can sell at the price decided by the seller as the AMC cannot create new units to balance the market price to iNAV.

So please remove this from the article as this is not the norm.

By: Karthik Rangappa

Karthik Rangappa — Wed, 25 Dec 2024 04:08:42 +0000

In reply to Gaurav Joshi. Thanks Gaurav for pointing that out. Will try and fix. I hope you continue to enjoy learning on Varsity :)

By: Gaurav Joshi

Gaurav Joshi — Mon, 23 Dec 2024 11:08:52 +0000

A few of the charts for example in section 29.7 – ETF liquidity, the graph comparing how Mirae vs LIC Nifty 50 ETF track the underlying index, there is no legend explaining which color line represents which ETF. This problem exists in a few other graphs in this module too.

Thanks to varsity for making me realise I was brainlessly investing in the highest return small cap funds and helping me create a portfolio taking into account my goals future plans.

By: Karthik Rangappa

Karthik Rangappa — Wed, 11 Dec 2024 03:41:42 +0000

In reply to Aayush. Ah ok. I hope its clear now. Else, please do feel free to post an elaborate query, will be happy to share whatever I know.

By: Aayush

Aayush — Tue, 10 Dec 2024 15:26:56 +0000

Thanks for looking into it, Karthik. I got curious on how price is working for MON100, read this whole article, but still wondering 🙂

By: Karthik Rangappa

Karthik Rangappa — Sat, 07 Dec 2024 00:02:49 +0000

In reply to Aayush. Aayush, good question. I'm not sure about this, let me get back back.

By: Aayush

Aayush — Fri, 06 Dec 2024 17:16:24 +0000

How does price for an NSE/BSE ETF tracking NASDAQ100 work?

“If there’s a premium, the authorized participant (AP) will buy all the underlying securities that make up the ETF creation unit.”

But the underlying securities are traded during NASDAQ working hours, but the ETF trades on NSE/BSE in their working hours. So how will AP buy underlying securities?

By: Karthik Rangappa

Karthik Rangappa — Sat, 30 Nov 2024 03:15:26 +0000

In reply to Shivansh Agarwal.

1) Ah, not sure about this. Need to research.
2) Yes, this is a good way. But are you are about this? No TE for commodity ETFs?
3) Yes, that helps.

By: Karthik Rangappa

Karthik Rangappa — Sat, 30 Nov 2024 03:09:38 +0000

In reply to Shivansh Agarwal. Hmm, please do check the tracking error of these ETFs before you purchase.

By: Shivansh Agarwal

Shivansh Agarwal — Fri, 29 Nov 2024 07:59:27 +0000

1. why does commodity ETF’s don’t have tracking error?
2. as commodity ETF’s don’t have tracking error should we compare just on the basis of expense ratio?
3. should we also look at AUM wile comparing commodity ETF’s

By: Shivansh Agarwal

Shivansh Agarwal — Fri, 29 Nov 2024 07:54:15 +0000

I was looking at Silver ETFs and noticed that, on a day-to-day basis, they don’t always move in the same direction as silver prices. Even when they do move in the same direction, the magnitude of the movement isn’t the same. For example, on November 28th, when silver was down by only 0.5%, the ETFs dropped by 1.5-2%. Similarly, on November 29th, when silver rose by 0.7%, the ETFs increased by 1.5-2%. I have noticed this discrepancy on many occasions. There are even days when silver is up by 0.5%, but the ETFs are down by 0.5%.

By: Karthik Rangappa

Karthik Rangappa — Wed, 27 Nov 2024 12:21:40 +0000

In reply to Ayushman. Happy learning :)