Details ETF(Exchange Traded Fund) MF(Mutual Fund)
     
 Exit Load  ETFs do not charge exit load. Instead, investors pay broker commissions when they buy and sell share units of ETF. MF charge  Exit load.If redeemed before certain period the exit load is 1% before 1 year
Valuations ETFs trade throughout the trading day, like stocks mutual funds, trade only at the end of the day at the net asset value (NAV) price.
Basic Requirements You need to have Brokerage Account(DMAT)Account for ETF sell or Buy Offline or online option 
Regular Management Charges Investment management fees for exchange-traded funds (ETFs) are deducted by the ETF  company, and adjustments are made to the net asset value (NAV) of the fund on a daily basis. These management fees are never directly seen on any investor statements and are handled in-house by the fund company. Exp for ETF can vary from 0.1% to  1.5% A Mutual Fund’s Operational expense fees is knnown as the expence ratio.Exp Ratio in MF is predefined and communicated to Customers as follow: Upto 2.50%
  Details of Fees charged are: Details of Fee charged are:
  1: Trustee fee 1: Trustee fee
  2: Audit fees 2: Audit fees
  3: Custodian fees 3: Custodian fees
  4: RTA Fees 4: RTA Fees
  5: Marketing & Selling expense incl. agent commission 5: Marketing & Selling expense incl. agent commission
  6: Cost related to investor communications 6: Cost related to investor communications
  7: Cost of fund transfer from location to location 7: Cost of fund transfer from location to location
  8: Cost of providing account statements and dividend redemption cheques and warrants 8: Cost of providing account statements and dividend redemption cheques and warrants
  9: Costs of statutory Advertisements 9: Costs of statutory Advertisements
  10: Cost towards investor education & awareness (at least 2 bps) 10: Cost towards investor education & awareness (at least 2 bps)
  11: Brokerage & transaction cost over and above 12 bps and 5 bps for cash market transactions and derivative transaction respectively 11: Brokerage & transaction cost over and above 12 bps and 5 bps for cash market transactions and derivative transaction respectively
  12: Service tax on expenses other than investment and advisory fees 12: Service tax on expenses other than investment and advisory fees
  13: Investment Management & Advisory Fee 13: Investment Management & Advisory Fee
  14: Service tax on brokerage and transaction cost 14: Service tax on brokerage and transaction cost
  15: Other Expenses 15: Other Expenses
Cost Annually 0.1% to 1.5% Annually 1.0% to 2.5%
Fund Management Strategy There is not active investment management by Skilled fund manager as ETF replicates specific Benchmark and invest passively based on Benchmark There is active investment management by Skilled fund manager as a motive of MF is to outperform the market and invest actively based on In-house research and find objective
     
Suitability Suitable or short run investments so will  be able to save exit loads and will have good return trade-off Those who wish to remain invested for the long run
Performance Snap Reliance ETF Nifty BeES – Performance Snapshot as on Mar 05, 2018  
  Period Absolute Returns (%)
Here We are taking Large cap ETF ad Large Cap MF from the same AMC we can see the returns difference in MF and ETF get created due to active management…
1 week -2.1
1 month -2.7
3 months 2.6
6 months 4.5
1 year 17.9
2 years 41.4
3 years 19.4
5 years 82.5
   
Mirae Asset India Opportunities Fund – Direct Plan (G) – Performance Snapshot as on Mar 05, 2018  
Period Absolute Returns (%)
   
1 month -2.8
3 months 0.2
6 months 3.5
1 year 21.3
2 years 57
3 years 40.2
5 years 168.5
 Conclusion An investor who is looking for Active investment management and better returns in the long run Mutual fund is most suitable as the historical returns are better after all Management changes and Exp ratios are deducted. One condition is that before making MF investment be assured that you are selecting a good fund based on expert advice and that your advisor monitors the same for you.ETFs are suitable in a market condition where no one can outperform so one can  save expense charges from AMC and in short run load and fees.
     
     
Geeta Choudhary    
Para Planner – Dilzer Consultants Pvt Ltd