What is an ETF fund?
An ETF, or Exchange-Traded Fund, is an investment fund that holds a collection of assets like stocks or bonds and is traded on stock exchanges, similar to a stock. It allows investors to buy and sell shares throughout the trading day, providing an easy way to diversify their investments.
Disclaimer: The information provided in this blog post is for educational purposes only and should not be considered financial advice.
Why Invest In ETF Funds ?
- Diversification :ETFs typically hold a basket of different assets
- Lower Costs: Many ETFs have lower expense ratios compared to mutual funds
- Liquidity: ETFs trade on exchanges like stocks
- Flexibility: They offer various investment strategies, including exposure to specific sectors, commodities, or international markets.
- Tax Efficiency: ETFs generally have a more favorable tax structure compared to mutual funds
Top 5 Best ETFs Funds In India
| ETF NAME | 1 Year Return | 3 Year Return | 5 Year Return |
|---|---|---|---|
|
Nippon India ETF Nifty 50 BeES |
22.19% |
58.11% |
109.11% |
|
Mirae Asset NYSE FANG+ ETF |
65.38% |
92.38% |
N/A |
|
Nippon India ETF Nifty Midcap 150 |
31.16% |
89.22% |
237.14% |
|
HDFC NIFTY Smallcap 250 ETF |
30.82% |
N/A |
N/A |
|
SBI GOLD ETF |
23.20% |
34.13% |
89.84% |
*Performance Data Based On Date:19/11/2024. This Returns Not Based On CAGR*
OVERVIEW :Top 5 Best ETFs Funds In India
- Investment Objective: The ETF aims to achieve this by investing in the same stocks that constitute the Nifty 50 Index.
- AUM (INR): 34,093Cr.
- No. Of Stocks: 50
- Expense Ratio:0.04%
- Investment Objective: The primary investment objective of the fund is to track the performance of the NYSE FANG+ Index. Which is composed of 10 highly traded growth stocks in the technology and consumer discretionary sectors. Companies Like Facebook(Meta) ,Netflix ,Google(Alphabet) ,Apple
- AUM (INR): 2,369 Cr.
- No. Of Stocks: 10
- Expense Ratio: 0.66%
- Investment Objective: Aims to replicate the performance of the Nifty Midcap 150 Index.
- AUM (INR): 1,752Cr.
- No. Of Stocks: 149
- Expense Ratio: 0.21%
- Investment Objective: Aims to track the performance of the Nifty Small cap 250 Index
- AUM (INR): 530Cr.
- No. Of Stocks: 250
- Expense Ratio: 0.20%
- Investment Objective: The objective of the SBI GOLD ETF is to provide investors with a convenient and cost-effective way to gain exposure to the price movement of gold.
- AUM (INR): 5411Cr.
- No. Of Stocks: 3
- Expense Ratio: 0.65%
Factors to Consider While Investing in ETFs
1.Investment Objectives Risk: How much risk are you willing to take? Some ETFs are safer, like those that invest in bonds, while others may be riskier, like those that invest in tech stocks. Time: How long do you plan to hold the ETF? Longer-term investments may handle more risk, but short-term ones may require safer choices
2. Expense Ratio: This is the annual fee you pay to invest in the ETF. The lower the expense ratio, the less it costs to own the ETF. Always look for low-cost options to maximize your returns
3.Liquidity (Ease of Buying/Selling): You want to buy and sell ETFs easily without paying too much extra. Look for ETFs with higher trading volume, meaning they’re more liquid and have lower costs to trade.
4. Performance History: Check how the ETF has performed in the past. While past performance isn’t a guarantee of future results, it can give you an idea of how it reacts to market changes.
5.Tracking Error: This tells you how well the ETF tracks the performance of its index (the market or sector it is trying to mimic). Smaller tracking error means the ETF is doing a good job following its index.
6.Reputation and Size of the ETF: Choose ETFs from reputable companies with a good track record. Bigger ETFs (those with more money invested) tend to be more stable and easier to trade
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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