Investment in best ETF

If you want an ETF instead of picking individual stocks, the “best” one will really depend on what your investment goal is.

• A low-cost Nifty 50 ETF (or Nifty Next 50 ETF) is a simple and sensible starting point for most investors. It will give exposure to India’s top 50 companies across sectors. It will reduce the stock-specific risk to a bare minimum. And above all, it will require no active tracking.
  • Nippon India ETF Nifty 50 BeES and SBI ETF Nifty 50 are among the most liquid ETFs. Their expense ratio is also about 0.04% (very low as compared to traditional mutual funds).

• Nifty 100 ETF gives a slightly broader exposure. It will also include emerging large-cap names that may grow faster over time. For long-term passive investors, combining the Nifty 50 and the Nifty Next 50 can work well. This can be done by investing in a Nifty 100 ETF. HDFC and Nippon offer ETFs that track the Nifty 100 Index.

The key things to check are the expense ratio and the tracking error.

Disclaimer: This content is for informational purposes only and should not be considered investment advice.