Feature Post

Understanding ETFs Uses, Returns and Comparison with Mutual Funds and Stocks

 Exchange-Traded Funds (ETFs) have gained popularity among investors for their unique features and benefits. In this blog, we'll explore the uses of ETFs, their potential returns, how they differ from mutual funds and stock investments, and their safety profile. What is an ETF? An ETF is a type of investment fund that trades on stock exchanges, much like individual stocks. It holds a collection of assets, such as stocks, bonds, or commodities, and aims to track the performance of a specific index, sector, or asset class. Uses of ETFs Diversification : ETFs allow investors to gain exposure to a wide range of assets without having to purchase each individually. For instance, an ETF tracking the S&P 500 gives you exposure to 500 different stocks, reducing the risk associated with individual stock investments. Cost Efficiency : ETFs often have lower expense ratios compared to mutual funds. They typically pass on lower management costs to investors since they are often passively man
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Customer Due Diligence, KYC Policies and Some Important Relationships Between Banker and Customer

  • Some legal Relationships between Banker and Customer
Debtor-Creditor
Creditor-Debtor
Mortgagor-Mortgagee
Bailee-Bailor
Trustee-Beneficiary
Lessee-Lessor
Pricipal-Agent

  • Approach of KYC as per RBI guidelines is
    • To prevent bank from being used, intentionally or unintentionally, by criminal elements for their money laundering activities
    • To help banks to know their customer and their financial transactions better.
  • KYC Policies laid down by RBI
    • Customer Acceptance Policy (CAP)
    • Customer Identification Process
    • Monitoring of Customer Transactions
    • Risk Management
  • Customer Due Diligence – It can be defined as any measure undertaken by a financial institution to collect and verify information and positively establish the identity of customer. Board approved customer acceptance policy is the base of CDD. Three Types of CDD –
    • Basic Due Diligence
    • Simplified Due Diligence
    • Enhanced Due Diligence

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