Can someone tell me which one is better… mutual fund or etf??
Etf is better then mf
- No exit load
- It is traded like shares
- It provide better returns than mf
Thank you for information. i would like to know how to invest in etf.
If i want to invest Rs 2000 in MF i would get some NAV points which may raise at certain point of time.
Whereas in etf i see that only one share can be bought, so howz etf more benefit?
Please explain good strategies to invest in etf.
Buy cpse etf and kotak nifty etf and also in Bharat 22
An ETF is one of the most innovative instruments EVER to be created. In countries like US the answer would be obvious - ETF. But in case of India no so much. We hardly have nay choice when to comes to ETF’s. There are just about 31 odd ETF’s compared to over 2000+ in the united states.
In the developed markets ETFs are a rage. In 2016 the global ETF inflows were on an average $12000 dollars a second or Rs 7,79,280 (at 64.94).
In India the total AUM of ETFs is just over $4 billion compared to the $3 trillion in US. But however the popularity seems to be increasing thanks in no small part to the govt. The govt of India as part of is divestment program launched 2 ETFs CPSE ETF and the recent Bharat 22 ETF. From what I could tell the response to Bharat 22 was solid.
ETFs are passive instruments which track an Index or asset and since they are passive the cost is extremely low. The Expense ratio of an Equity MF will be in the range 1.5%, while the Expense ratio of Bharat 22 ETF was 0.0095%. But cost doesn’t guarantee returns especially when you don’t have much choice. For now at least in the Indian context MFs are the better choice.
I am not discouraging you from investing in ETFs. If you are a novice and if you would like to invest the most well known stocks, you could simply but a Nifty ETF offered by AMCs such as SBI or Kotak. You can also invest in the NASDAQ-100 ETF by MOSL if you would like to have exposure to international stocks.
Also check this
When i looked at the chart of kotak nifty ETF, i saw a large drop from 1000 range to 100 range on 27 July. Does ETF provides bonus? or is it some type value adjustment? Can u please explain?
ETF are passive fund . Mutual Fund are active fund
ETFs Mutual Funds
Trade during trading day Trade at closing NAV
Low operating expenses Operating expenses vary
No investment minimums Most have investment minimums
Tax-efficient Less tax-efficient
No sales loads May have sales load
Need Demat Account Not mandatory
Buying ETF is like buying stocks
There are liquidity risks with ETF’s. Even with something like JUNIORBEES, if you try to cash out say, 5 lakhs worth of investment, your traded price will end up quite a bit below the market price at which you place the order (check the market depth and trade volumes for ETF. Except LIQUIDBEES and a few others, the numbers are quite low) . This volatility isnt a concern with MF’s
So do you suggest to go with Mutual fund?
I am still confused, and want to invest for long term
Yep, mutual funds would be better. However you can also invest small amounts in ETFs just to see how they work. But please consult your financial advisor before taking any decisions based on advice from strangers like us.
Haha… thank you “stranger”. Was taking opinions, not deciding based on your points.