Why Go For Exchange traded funds etf vs mutual funds investing in india
Exchange traded funds are For long Term stock investment.
In india many mutual Funds are now traded on Exchanges ,but Still the best Funds are index Funds if you are thinking About long term investments.
What are Advantages of Exchange traded index Funds?
There are many
1. There are Virtually no running Cost as you Do not pay money to Mutual Fund manger For Selecting Stocks.
Should you Do that ?
Are Not Experts better than ordinary persons as they Are masters of Stock trading?
No they Are Not better,Sometimes they are worse
For Last one year nifty returns were 67.3 percent and Sensex returns Were 71 percent
Assume returns of 70 persons as Average For Sensex or Nifty
out of Sample of 236 Equity Diversified Funds in India only 160 Were Able to give returns Above 70 percent in Last One year Which means 1/3 of experts lost your money by picking Stocks.And you would have Done better by just investing in nifty or Sensex.
Just See Some Big names Which underperformed and their returns.We have Delibrately given one fund From one AMC to keep List Short.
| Name | Returns |
| JPMorgan India Equity | 69.6 |
| Franklin India Opportunities | 66.7 |
| ICICI Pru Growth | 63.5 |
| Religare Growth Fund | 61.6 |
| IDFC Imperial Equity | 60.4 |
| Principal Global Oppor | 58.1 |
| Reliance Equity Fund | 57.3 |
| UTI Infra-Advantage - | 52.6 |
| Escorts High Yield Equity | 51.1 |
| Fortis Equity Fund | 47.9 |
| LIC MF India Vision Fund | 45.3 |
| HSBC Dynamic Fund | 42.4 |
| Religare AGILE Fund | 33.5 |
| JM HI FI Fund | 16.9 |
And Ask yourself Also Did you get 70 percent returns in Stocks Which you invested yourself?
if answer is no ,opt For ETF today itself
2. ETF provide For opportunity to invest in no load mutual funds online.you Do not need to buy at Closing NAV.you Can buy if there is Severe Dip intraday.
3. Ease of Selling.No Need to Fill Form and Wait For Days
Hi,
An Index ETF follows passive fund management strategy allowing investors to take exposure to the basket of funds in the index at once. They may use ETF to complement their existing actively managed equity portfolio. Mutual funds on the other hand, largely believe in active fund management, offering to exploit market opportunities when they arise. Indian market offers such opportunities, thereby making active management attractive.
Regards,
The Religare Customer Care Team.