In view of the growing popularity of exchange traded funds (ETFs), a fintech firm recently rolled out a platform dedicated only to these funds. Projected as the gateway to the world of ETFs, it facilitates access to 9,500 plus Indian and international ETFs.
Launched by Financial Basket Capital, this financial technology platform gives technology solutions to SEBI-registered investment advisors. It is not an investment advisor, nor does it facilitate any trading or transactions.
While rationalising the reasoning of launching an exclusive platform for ETFs, Sandeep Mishra, Co-founder of ETF Junction, says: “ETFs are the best combination of mutual funds and stocks. Basically, a diversified portfolio which diminishes risk but can be traded. The strength of ETFs lies in their transparency, simplicity and cost effectiveness. Globally, ETFs have become an integral part of an investors’ portfolio and it's just a matter of time that it is replicated in India.”
He also adds that this category is a part of asset allocation and not an isolated product.
“Having multiple asset classes or categories on our platform would not help the cause. We would be glad to help investors to understand that this category is a part of their asset allocation and not an isolated product,” Mr Mishra adds.
There are four key tools that this platform offers:
A. ETF screener: It allows investors to access details of ETFs across parameters such as overview, performance, risk parameter and fundamentals.
In the fundamental section, it shares a slew of key details such as PE Ratio, PB ratio, YTM, turnover ratio and largest sector.
And when someone wants to find out the ‘performance’, one can gauge it in the past one week, one month, three months, six months and one year.
Within the risk parameter section, one can find out the Morning Star risk rating, alpha (1 year), beta (1 year) and standard deviation (1 year).
B. ETF Compare: In this, one can write the names of up to five ETFs and compare their performance along several parameters such as performance, portfolio, costs.
Within performance, one can compare the performance across time durations such as one week, one month, one year and year to date (YTD).
Within portfolio, one can compare funds based on the number of holdings and top 10 holdings with weightage.
Within cost, one can see the expense ratio, impact cost and tracking error of the funds being compared.
C. ETF stock exposure: The ETF stock exposure took takes you to ETFs with significant holdings in that stock.
After keying in the stock’s name, one can get access to the entire list of ETFs that have exposure to that stock.
D. ETF country exposure: In this tool, one can search for two kinds of data. The first one is one where one can write a country’s name, and find out all ETFs which have exposure to it.
Alternatively, one can also select the ETF to determine the countries it has exposure to.