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Unit Linked Insurance Plan (ULIP)
A Unit Linked Insurance Plan (ULIP) combines the benefits of both the insurance cover and market-linked investment options. It aims for wealth creation and secure the financial future of your family.
Features of Unit Linked Insurance Plan (ULIP):
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Premium is divided into two parts:
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You choose the amount invested based on financial goals
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5-year lock-in period which promotes financial discipline and long-term savings
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Partial withdrawals allowed post lock-in period
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Tax exemptions under Section 80C and 10(10D) of the Income Tax Act, 1961
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You are allowed easy fund switching as per your investment strategy
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Portfolio diversification is allowed for future benefits
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Guaranteed sum assured is paid to the nominee in case of your demise
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ULIP plans provide high returns and long-term advantages
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Guaranteed Return Plans
Guaranteed Return Plans (GRPs) are a type of investment plan that offers a fixed rate of return on your investment. This means that you know exactly how much money you will receive when the plan matures, regardless of how the market performs. GRPs are typically offered by insurance companies and are often structured as life insurance policies.
Features of Guaranteed Return Plans:
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Guaranteed returns plans offer fixed returns, providing stability.
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Complete risk coverage ensures your investment is secure
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Provides life protection along with the advantage of tax deductions
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Ideal for investors with a lower risk appetite
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Total Sum Assured + Vested or Guaranteed Bonus given to the investor at plan maturity.
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Not directly linked to the market, shielding you from market fluctuations.
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Investors can enjoy maximum returns without being directly affected by market changes.
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Suited for those seeking a straightforward and secure investment option.
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Capital Guarantee Solution Plan
A Capital Guarantee Solution Plan is a type of investment plan that offers the benefits of both market-linked investments and guaranteed returns. This means that you have the potential to earn high returns from the market, while also being protected from losses.
Features of Capital Guarantee Solution Plan:
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Protects your invested money from losses during economic downturns
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The insurance company absorbs any losses, ensuring your principal is safeguarded
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Capital Guarantee Plans are like ULIPs, combining guaranteed return plans
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50-60% of your investment goes into debt instruments for capital protection, and the rest is invested in equity.
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Minimum policy tenure is 10 years, with a premium paying tenure of 5 years.
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On policy maturity, the full premium is returned along with additional benefits.
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Capital gain funds focus on conservative instruments to minimize the risk of losses, providing guaranteed returns.
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Retirement Plans
The retirement plans for NRI in India are the investments designed for your future retirement needs. It helps you to build a fund by making lump sum investments or regular payments over time. These plans ensure a secure future with a guaranteed steady income stream in your retirement years.
Features of Retirement Plans:
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Retirement plans are tailored policies securing your financial future post-retirement.
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They aim to build a financial nest, ensuring a desired lifestyle even after the earning phase ends.
Pension Plans
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Ensures a steady income post-retirement when regular earnings cease.
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Allows regular savings during the earning years, providing stability in retirement.
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Designed to combat inflation, ensuring NRIs receive maximum returns.
Annuity Plans
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Offers consistent payouts throughout your post-retirement life.
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Accumulated funds from the earning phase can be systematically invested.
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After retirement, these funds can be used to purchase an annuity plan, ensuring regular paybacks as per the plan's policies.
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Child Plan
Child plans for NRIs are insurance-cum-investment plans that are designed to secure the financial future of your child. These plans combine life insurance coverage with the potential for wealth accumulation through market-linked investments. NRIs in Singapore can leverage these plans to meet their child's education, marriage, or other financial needs, offering a dual benefit of protection and wealth creation.
Features of Child Plans:
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Child plans for NRIs ensure a disciplined financial approach towards your child's education
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Choose from monthly, half-yearly, yearly, or single-pay options to fit your financial preferences
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Receive a lump-sum amount at the end of the policy term, creating a substantial corpus for your child's education
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The child plans not only help with education funds but also provide life cover, ensuring financial security for your family.
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In the event of your demise, the child plan provides triple benefits of life cover amount to the beneficiary, the insurer covers the remaining premiums, and the child receives a monthly payout for expenses.
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Tailored payout options are available at key milestones in your child's life, offering flexibility as your child progresses through education.
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National Pension Scheme (NPS)
The National Pension Scheme (NPS) is a voluntary, long-term retirement savings plan in India. It allows you to contribute and accumulate savings, with the aim of creating a pension corpus for post-retirement financial security. The scheme offers tax benefits in India to enhance the appeal of long-term retirement planning for NRIs.
Features of National Pension Scheme (NPS):
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National Pension Scheme (NPS) is a reliable government-backed investment avenue.
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It allows NRIs to invest in equity, debts, or a combination of both.
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Available for individuals aged 18 to 60 years, making it an inclusive investment option.
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Utilize Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts for NPS investments.
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Opt for either Active Choice or Auto Choice under the National Pension Scheme.
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Active Choice allows allocation between equity, corporate bonds, and government securities.
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Asset allocation is automatic and linked to your age, removing the need for active decision-making by you.
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NPS is designed to secure your retirement years.
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Government backing ensures reliability, making it a trustworthy option for long-term financial planning.
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Public Provident Fund (PPF)
The Public Provident Fund (PPF) is a long-term savings scheme offered by the Indian government, designed to encourage systematic savings and provide tax benefits. NRIs in Singapore can consider PPF as a secure investment option, offering a fixed interest rate and the potential for long-term wealth accumulation.
Features of Public Provident Fund (PPF):
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Public Provident Fund (PPF) is a long-term savings and investment option provided by the Government of India.
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Non-Resident Indians (NRIs), who already had a PPF account as resident citizens in India, can benefit from PPF.
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PPF operates as a 15-year investment plan, extendable for an additional five years.
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PPF allows a minimum annual investment of Rs. 500 and a maximum limit of Rs. 1.5 lakhs per year.
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Tax benefits, including exemptions under Section 80C and 10(10D) of the Income Tax Act, make PPF financially advantageous.
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The interest earned on PPF and the maturity amount are tax-free, enhancing the overall financial benefit.
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NRIs can make partial withdrawals after five years from the end of the financial year of the initial deposit.
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Mutual Funds
Mutual Funds are investment options that pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. NRIs in Singapore can participate in mutual fund schemes in India to achieve professional management of their investments, diversify risk, and potentially earn returns based on market performance.
Features of Mutual Funds:
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Mutual Funds are a safer and increasingly popular choice compared to direct equity for NRIs in Singapore.
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They provide a secure avenue for better returns, especially for those with limited expertise in foreign investment.
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NRI mutual fund investments are governed by the Foreign Exchange Management Act (FEMA), 1999.
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NRIs can invest in mutual funds through Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts.
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Investments must be made in Indian National Currency and not in foreign currency.
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NRIs should choose funds aligning with their risk profile and financial objectives.
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Fixed Deposit (FD)
Fixed Deposits (FDs) are financial instruments where NRIs in Singapore can deposit a lump sum amount with a bank or financial institution for a fixed period, earning a predetermined interest rate. FDs provide a secure investment option with a guaranteed return at maturity. This makes them a stable choice for individuals looking to preserve capital while earning interest.
Features of Fixed Deposits (FDs):
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Fixed deposits are not only common among Indian citizens but are also widely favoured by Non-Resident Indians (NRIs).
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NRIs can deposit their money in India through different accounts:
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Fixed Deposit in NRE Account (Non-Resident External Account)
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Fixed Deposit in NRO Account (Non-Resident Ordinary Account)
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Fixed Deposit in FCNR Account (Foreign Currency Non-Resident Account)
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Choose from a variety of terms for Fixed Deposits to suit your financial goals.
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FDs offer a straightforward investment approach with a fixed interest rate.
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Fixed Deposits are known for being a low-risk investment option, ideal for conservative investors.
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Explore potential tax benefits associated with Tax Saving Fixed Deposits, considering applicable regulations.
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Real Estate
Real Estate refers to property in India, including land and buildings, that NRIs in Singapore can buy or invest. It is a tangible asset with the potential for appreciation over time. NRIs may consider real estate as a form of long-term investment, generating rental income or capital gains upon resale, and it can offer diversification within an investment portfolio.
Features of Real Estate:
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Real estate prices have significantly risen, making it convenient for NRIs in Singapore to invest in property in India and earn extra income through renting.
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Real estate stands as a reliable investment option with promising long-term returns and steady growth.
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NRE Account, NRO Account, and FCNR Account serve as essential financial tools for NRIs engaging in real estate transactions.
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NRIs can diversify their income streams by investing in Indian real estate.
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NRIs can leverage the growth potential of the property market for sustained financial prosperity.
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Stock Market Investment
Stock Market Investment involves buying and selling shares of publicly traded companies on stock exchanges in India. NRIs in Singapore can participate in the stock market to own a portion of a company and potentially benefit from capital appreciation and dividends. It carries risks but also offers opportunities for wealth growth, making it a key avenue for long-term investment and portfolio diversification.
Features of Stock Market Investment:
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You can diversify your investments by adding stocks to your portfolio.
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Stocks offer the potential for long-term growth and wealth accumulation.
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Understand the balance between risk and reward in stock market investments.
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Conduct thorough research and analysis before making stock investment decisions.
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Stay informed about market trends to make informed investment choices.
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Some stocks provide dividend income, contributing to a steady cash flow.
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Implement risk management strategies to protect your investments.
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Align stock investments with your financial goals and risk tolerance.
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Portfolio Management Services (PMS)
Portfolio Management Services (PMS) are investment services in India where NRIs in Singapore can entrust their funds to professional portfolio managers. These managers make investment decisions on behalf of the client, aiming to achieve the specified financial goals and objectives. PMS provides personalized and actively managed portfolios, catering to the individual risk tolerance and investment preferences of the client.
Features of Portfolio Management Services (PMS):
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PMS is a specialized investment offering designed for High Net-worth Individuals (HNIs) in Singapore seeking to maximize their investment returns.
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PMS appoints a professional fund manager to handle the client's investment portfolio, aligning with their goals and risk preferences.
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PMS provides a high level of flexibility and control to the client over their investment portfolio.
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Clients have the freedom to choose investments and can enter or exit specific investments at their discretion, a feature not available in traditional mutual fund setups.
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The key advantage of PMS is the engagement of a professional fund manager.
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PMS grants clients the freedom to enter or exit specific investments at any time.
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The personalized approach, coupled with professional management, aims to optimize the performance of the client's investment portfolio.
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Bonds and Non-Convertible Debentures (NCDs)
Bonds and Non-Convertible Debentures (NCDs) are debt instruments in India in which NRIs in Singapore can invest. Bonds are fixed-income securities issued by the Government of India or corporations, paying periodic interest and returning the principal at maturity. NCDs, similar to bonds, are debt instruments without the conversion feature, offering a fixed interest rate and principal repayment. NRIs can consider these instruments for stable income and capital preservation in their investment portfolio.
Features of Bonds and Non-Convertible Debentures (NCDs):
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Investing in bonds and non-convertible debentures (NCDs) is a safe and reliable choice for NRIs in Singapore looking to generate fixed income from India.
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NCDs offer NRIs a secure and long-term investment option, backed by the assets of the issuing company.
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Perpetual bonds are unique debt instruments without a specific maturity date.
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PSU bond investors enjoy tax-free interest income under section 10 (15) (IV) (h).
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NRIs can avail of tax deductions by investing in REC and NHAI capital gain bonds under section 54 EC.
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Bonds and NCDs are reliable tools for generating fixed income, providing a predictable and steady stream of returns.
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Including bonds and NCDs in the investment portfolio allows NRIs to diversify their holdings.
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Pre-IPO investment
Pre-IPO (Initial Public Offering) investment in India involves investing in a company's shares before it goes public and are listed on a stock exchange. NRIs in Singapore may consider pre-IPO investments as an opportunity to potentially benefit from the company's growth and value appreciation once it becomes publicly traded.
Features of Pre-IPO investment:
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Pre-IPO investment involves investing in a company before it becomes publicly traded.
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This opportunity can yield substantial returns, but it comes with higher risk due to limited oversight and less financial information available for private companies.
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Investing in a company before its Initial Public Offering (IPO) can be lucrative, presenting the chance for significant profits.
Gathering information about its financial health, business model, and market potential is essential for informed decision-making.
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Implementing risk mitigation strategies is essential when considering pre-IPO investments.
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Investors should diversify their portfolios and carefully assess the potential risks and rewards associated with each opportunity.
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Balancing the potential for high returns with the inherent risk is key in pre-IPO investments.
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Exchange Traded Funds (ETFs)
Exchange Traded Funds (ETFs) are investment funds that trade on stock exchanges in India, and NRIs in Singapore can invest in them. ETFs typically represent a basket of assets such as stocks, bonds, or commodities and aim to track the performance of a specific index. NRIs may find ETFs attractive due to their diversification, liquidity, and cost-effectiveness, as they offer a way to invest in a broad market or sector without directly buying individual securities.
Features of Exchange Traded Funds (ETFs):
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You can gain access to a diverse portfolio by considering ETF investments.
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ETFs often track market indices, providing a simple way to invest in a broad market segment.
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ETFs offer a cost-effective way to enter various markets with lower fees compared to some other investment options.
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ETFs are traded on stock exchanges, providing liquidity for you to buy or sell shares during market hours.
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ETFs typically have a low entry threshold, allowing you to start with smaller amounts.
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ETFs disclose their holdings regularly, providing transparency to investors about the assets included in the fund.
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