The following matrices can be found on ETF tab -
1. Price: It is the price of one unit of the ETF and the price fluctuations in real-time.
2. Liquidity: Liquidity is the ability to buy and sell the assets quickly. Liquidity is a significant part of what makes ETF funds accessible, manageable, and accurate. A large proportion of ETF trades take place between a bullish or bearish viewpoint and a liquidity provider. ETF's liquidity is based on the average daily traded value.
- High liquidity: Average daily traded value of the ETF is high
- Low liquidity: Average daily traded value of the ETF is low
- Medium liquidity: Average daily traded value of the ETF is medium
Lower levels of liquidity lead to greater risk, larger discrepancies between net asset value and the value of the underlying securities, and a decreased ability to trade profitably.
3. Expense Ratio: It is the amount companies charge investors to manage a mutual fund or exchange-traded fund (ETF). The expense ratio represents all of the management fees and operating costs of the fund.
If an average ETF carries an expense ratio of 0.30%, which means the fund will cost you ₹3 in annual fees for every ₹ 1,000 you invest.
4. Tracking Error: It is the difference between the returns of the index fund and the target index is known as a fund's tracking error. A large tracking error between a passively managed ETF and the index it tracks may be a red flag. It could signal excessive trading costs or issues relating to fund management.
