Is it better to invest in ICICI/SBI nifty 50 ETF or since I know the stocks and their weights in Nifty 50, can I invest using kite basket feature? Say I would like to invest 2 Lakh Rupees at a time. Is there a way to see if the expense incurred through various charges(transaction etc) through basket goes above the 0.05% expense ratio and transaction charges of the ETF? I understand that since charges are mostly fixed, if I invest smaller amounts then it may not be very viable and hence I have mentioned 2 Lakh Rupees.
I would actually like to invest in say SBI quality 30 ETF(say 1 or 2 lakh every 2 or 3 months). But the volumes are very low and currently not viable. Since the ETF is an index ETF that follows NIFTY 200 Quality 30 I was thinking of creating a basket and investing. But not sure if the expenses will be large to eat significantly into the profit margin.
Rather than investing in the ETF, you want to directly invest in the stocks according to their weightage in the Index, right?
This might not be a viable alternative as replicating actual Index buy manually buying stocks will not be possible with small capital. plus you have to also be aware of regular rebalancing and maintenance of the weightage of stocks in the Index, which changes frequently, and will result in high costs.
Thanks for the quick reply. I also thought so. So the ETFs and MFs are able to rebalance because of the large capital while because of the small capital the costs are high if we try to replicate the index and maintain them through manual stocks. I was looking for some easy diversification checking out Nifty volatility and quality index. Probably then I need to stick with MFs and selective stocks that I trust.
mutual funds have access to big capital and also any expenses they incur are levied on client as expense ratio so don’t have to worry about costs as well…
had similar idea like you but it is not possible with limited capital plus even if it were maintenance will be cumbersome… investing directly in mutual fund eases all hardworks plus can invest small amounts as well…