International ETFs Compare

Additional Useful Information

• An investor can buy “Units” of these ETFs. These units can be purchased at a price which is called the “Net Asset Value or NAV”. The NAV of these funds keeps changing daily depending upon the changes in the stock prices of the companies that are held by them.

• The investors can sell these units anytime at the NAV price prevailing on the day of the sale –

• Total Purchase Amount	=	Number of Units X NAV as on the day of purchase
  Total Sale Amount	=	Number of Units X NAV as on the day of sale
  Total Gain	=	Total Sale Amount – Total Purchase Amount

• Considered a strong investment for those with a long-term investment horizon. That period is usually 5+ years.

• Unlike Mutual Funds, ETFs do not attract any exit load since investors sell their ETF units to other investors in the market.

Returns *

• International ETFs do not guarantee returns. They are subject to market risk.

• If held over a 5-year period of time, these funds can generate returns ranging from 6.5% to 17% per year.

• International ETFs come only in the form of Fund of Funds (FOFs).

Risk Level

• International ETFs are high-risk investments.

• International stocks are always risky. It is important to study the country and its financial conditions before investing.

Liquidity

• When an investor sells or redeems units of ETFs, the sale amount will be received by the investor in 2 working days (T+2).

• International ETFs, or Fund of Funds are typically liquid, but less as compared to other traditional ETFs.

Interesting Facts

• International ETFs are passive investments. They do not try to outperform market returns. They simply track the index and mirror its characteristics and returns, unlike mutual funds, that try to outperform market returns.

• ETFs do not have any manager-based risk, like in mutual funds. Since they track an index, ETF managers do not have to take risks that help them outperform the market.

• ETFs have lower transaction costs as compared to mutual funds. In other words, they are more cost efficient as compared to mutual funds.

Tax Implications

• Earnings received from International ETFs are taxable.

• When the investors sell the ETFs prior the maturity, the difference between the sale amount and the purchase amount is typically called “Capital Gains” or “Capital Loss” (if sale amount is lesser than the purchase amount).

• The tax that the investor must pay on Capital Gain is –
• Situation 1 – If the International ETFs are sold within a period of 2 years from investment, the Capital Gains earned (called Short Term Capital Gains) are taxed at 20% of the gains.
• Situation 2 - If the International ETFs are sold after a period of 2 years from investment, the Capital Gains earned (called Long Term Capital Gains) are taxed at 12.5% of the gains.

• There is no tax in case of “Capital Loss.”

• Any dividends/Interest/Payouts that investors receive from International ETFs is added to their taxable income and they need to pay tax according to their tax slab.

Where To Invest

• https://www.indmoney.com/stocks/category/international-etfs

• https://www.etmoney.com/mutual-funds/equity/international/50