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What is an ETF? What is a Bond ETF? What is NAV in relation to ETFs?...

What is an ETF? What is a Bond ETF? What is NAV in relation to ETFs? What type of investor should invest in a bond ETF?

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Answer #1

ETF stands for Exchange Traded Fund. An ETF is a fund designed to track the performance of an index. ETFs are traded just like stocks on the exchange.

Bond ETF is a type of ETF, which invest in bonds. These are passively managed funds.

The Net Asset Value (NAV) is defined as the sum of all the assets of the underlying (bonds in our case) and the cash minus the liabilities and then dividing by the number of units. NAV is calculated at the end of each trading day.

Investors who seek regular and steady income should invest in bond ETF. These are much safer than stock ETFs.

Can you please upvote? Thank you :-)

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