What's the best way to invest in Nifty IT?

Stocks
1

I want to invest in Nifty IT for the long term (5-10 years).

I think ETF is probably the best way. ICICITECH and ITBEES seem the most popular by AUM.

My question are:

  1. Are there a better way than ETF to invest in Nifty IT?
  2. If ETF is best, should I go with ICICTECH or ITBEES?
2

If you want to have a basket approach towards a sector, cannot invest in individual stocks, but want to invest in a sector, then investing in that sector’s index is one choice. And many indices don’t have index funds, only ETFs are available, so there is no other option but to invest in ETFs.

Nifty IT index is from NSE, there is another IT index from BSE, I don’t know if there is an ETF for this BSE IT index. And there are sectoral funds which invest in IT and other technology companies, you can check the funds if you want to. All these funds have either Nifty IT or BSE IT index as their benchmark.

So first you can check these funds and see if they have beaten their respective benchmarks over a period of time, each year, YTD etc and choose the funds, if you want to go that way. Else, go with ETFs.

If you want to go with ETFs, choose one with liquidity, NAV-price difference, tracking error, AUM, inception date etc.

Nifty IT index has lesser stocks than a fund that is based on this index or the BSE IT index, and I think more than 50% weight of the index is from the top 5 IT companies, in other words if these big companies rise index will rise, if they don’t perform, index will not. On the other hand, an IT fund has a wide range of stocks to choose from, including the IPOs I think. So this is one important aspect.

So collect some data, know about the available choice, have a plan as you want to invest for long term.

3

It is one of the equity investments I have for the long term. I have some individual stocks too.

4

1.There must be some mutual funds tracking nifty IT so can search for low expense ratio
2. IT BEES due to more liquidity

5

ICICITECH seem to have higher AUM, low expense and tracking error according to tickertape.

Why did you say it has more liquidity?

6

Do you know about liquidity?

7
  1. I compared MF vs ETF for Nifty IT (from ICICI MF). ETF seem to have lower expense ratio.
1 Like
8

compare volume traded per day( its around 1:30 yesterday) , see the total seller on best 20 bids. AUM might be higher as people must be buying units offline( you can place 1 basket lot to create new units for you) .

9

Yes , ETF has lower expense ratio .

10

Weird.

IIRC ITBEES had higher volume yesterday. But today, ICICITECH have twice the volume. :confused:

11

I guess ITbees have better liquidity.