Best ETFs to invest in India (2024)

Best ETFs to invest in India

  • Date : 18/10/2022
  • Read: 7 mins

There are so many AMCs offering so many Exchange Traded Funds (ETFs). Identifying which ETF to invest in can be an uphill task. We aim to make things easier by publishing information about the best ETFs, how to invest in them, and everything else you need to know.

Best ETFs to invest in India (1)

Exchange-Traded Funds (ETFs) are a basket of securities that you can directly buy or sell on a stock exchange. ETF funds track an underlying index. They are a lot similar to index mutual funds but are traded on the stock exchanges like stocks. Hence, they are often considered the perfect combination of stocks and mutual funds.

Some of the top-ranking Exchange-Traded Funds to invest in India include the Kotak Nifty PSU Bank ETF, with its one year returns of 51.05%, the Nippon India ETF Nifty PSU Bank BeES, which gives 51.05% returns for a year, the ICICI Prudential Nifty FMCG ETF which gives you 26.63% returns, the ICICI Prudential Bharat 22 ETF with 23.70% returns, etc.

Best ETFs for investment in India:

Best ETFs to invest in India (2)

(Source: https://www.mutualfundindia.com)

Looking at ways to kickstart your investments? Get inspired with helpful reads here.

Exchange Traded Funds (ETFs) – FAQs

1) What is an Exchange Traded Fund (ETF)?

An Exchange Traded Fund (ETF) is a financial security that tracks or replicates the performance of an underlying asset. The underlying asset can be an equity index, gold, or other commodities, bonds, etc. The ETF mirrors the performance of the underlying asset, also known as the benchmark. If the benchmark is an index, say, Nifty 50, the ETF invests in all the index securities as per their weightage in the index.]

2) What are the different types of ETFs available in India?

Types of ETFs available in India include equity ETFs, gold ETFs, debt ETFs, and international ETFs.

  • Equity ETFs: An equity ETF tracks the performance of an equity index. The index can be the Nifty 50 (e.g. SBI ETF Nifty 50), a broader index such as Nifty Midcap 150 (e.g. Nippon India ETF Nifty Midcap 150), a sectoral index such as Nifty Bank (e.g. Kotak Banking ETF), or a thematic index such as Nifty India Consumption (e.g. Nippon India ETF Consumption), etc.
  • Commodity ETFs: A commodity ETF tracks the performance of a commodity such as gold. Some examples of gold ETFs include Birla Sun Life Gold ETF, SBI Gold ETF, Axis Gold ETF, etc.
  • Debt ETFs: A debt ETF tracks the performance of a debt security. Some examples of debt ETFs include Bharat Bond ETF – April 2030 that tracks the performance of the Nifty Bharat Bond Index, LIC MF G-Sec Long Term ETF that tracks the performance of the Nifty 8-13 year G-Sec Index, DSP Liquid ETF that tracks the performance of Nifty 1D Rate Index, etc.
  • International ETFs: An international ETF tracks the performance of an index belonging to a foreign country. Some examples include MOSt Shares NASDAQ 100 that tracks the Nasdaq 100 Index, Nippon India ETF Hang Seng BeES that tracks the Hang Seng Index.

3) What is the process of buying ETFs?

ETFs are offered by Asset Management Companies (AMCs). You can invest in ETFs either at the time of the New Fund Offering (NFO) or buy them directly from the secondary market.

  • New Fund Offering (NFO): The AMC offering the ETF announces the NFO dates. You can subscribe to the ETF by filling the application form. Once the NFO closes, the AMC will allot the ETF units.
  • Secondary market: Once the NFO closes and the allotment to subscribers is completed, the ETF units are listed on stock exchanges like BSE and NSE. The trading of ETF units happens during market hours, just like equity shares. You can buy the ETF units through your stockbroker by placing an order from your trading account.

4) Is a demat account required for ETFs?

Yes, a demat account is required for investing in ETFs. You can place a buy order from your trading account. During the settlement process, your trading/bank account will be debited with the transaction amount, and the ETF units will be credited to your demat account. For selling ETF units, you have to place the sell order from your trading account. During the settlement process, the ETF units will be debited from your demat account, and your bank/trading account will be credited with the transaction amount.

5) What are the key advantages of ETFs?

Let’s look at some of the main advantages of ETFs:

  • Low expense ratio: The expense ratio of ETFs is low as compared to active mutual fund schemes. For most active mutual fund schemes, the expense ratio will range between 1.5% and 2.5%. But for an ETF, the expense ratio is usually less than 1%.
  • Real-time price discovery: In the case of other mutual fund schemes, the net asset value (NAV) at the end of the day is applied to the units bought by you. But in the case of ETFs, the trading of units happens on a real-time basis during market hours. As soon as your transaction is executed, you will know the price at which it was done.
  • Diversification: ETFs like those based on broader indices such as Nifty 50 give you exposure to a basket of 50 stocks. The Nifty 50 stocks represent more than 20 different sectors of the economy. So, ETFs give you diversification, which is essential for every investor.
  • Low minimum investment: While buying and selling ETFs, the minimum number of units to be bought/sold is 1 unit. Hence, the minimum investment amount required for ETFs is very low and affordable to people across income categories.
  • No fund manager bias: In an active fund, the fund manager decides which securities to buy, how many to buy, when to buy, at what price to buy, etc. All these decisions are dependent on the fund manager. Human decisions can be biased and can influence the returns of the scheme in an adverse manner. However, in the case of an ETF with a benchmark such as Nifty 50, the fund manager has to invest the ETF money in all the Nifty 50 constituents as per their weightage. This removes ‘fund manager bias’ as they have no say in which securities to buy, how many to buy, when to buy, at what price to buy, etc.

6) What are some of the disadvantages of ETFs?

Even the best ETF in India have do come with some disadvantages:

  • Demat account needed: Investing in ETFs requires you to have a demat account, which is not the case with other mutual fund schemes. A demat account comes with account opening charges and annual maintenance charges. Also, for executing ETF buying and selling orders, you will have to pay brokerage.
  • Low liquidity: The trading volumes in the case of some ETFs are low. Due to low liquidity, when buying ETF units, you may have to pay a premium to NAV. Similarly, due to low liquidity, when selling ETF units, you may have to sell them at a discount to NAV.
  • No SIP mode of investment: In the case of active mutual fund schemes, you can invest in them through systematic investment plans (SIPs). But in the case of ETFs, the SIP mode of investment is not available. Whenever you want to invest in ETFs, you have to buy the units from the market by placing an order from your trading account.

7) What are the factors one should consider while investing in an ETF?

Here are some key factors you should consider while investing in ETF funds:

  • Expense ratio: When choosing between two ETFs with the same benchmark, say Nifty 50, you should give preference to the ETF with a lower expense ratio. The general rule is, the lower the expense ratio, the better.
  • Tracking error: The returns given by an ETF may not exactly match the returns given by the benchmark. It happens because the fund manager may keep some cash to meet daily operations. The difference between the benchmark returns and the ETF returns is known as tracking error. When choosing between two ETFs with the same benchmark, say Nifty 50, you should give preference to the ETF with a lower tracking error. The general rule is, the lower the tracking error, the better.
  • Assets Under Management (AUM): You should ideally choose an ETF with a higher AUM. Bigger schemes may be subject to lower volatility. However, you should always give more preference to expense ratio and tracking error than AUM while choosing ETFs for investment.

8) What are some of the ETFs, based on various indices, that are available for investment in India?

Here is a list of some best ETF funds in Indiabased on various indices, available for investment in India:

Best ETFs to invest in India (3)Best ETFs to invest in India (4)Best ETFs to invest in India (5)Best ETFs to invest in India (6)

(Source:NSE Passive Investing Quarterly Update)

Note:The AUM is as of August 2022

Exchange-Traded Funds (ETFs) are a basket of securities that you can directly buy or sell on a stock exchange. ETF funds track an underlying index. They are a lot similar to index mutual funds but are traded on the stock exchanges like stocks. Hence, they are often considered the perfect combination of stocks and mutual funds.

Some of the top-ranking Exchange-Traded Funds to invest in India include the Kotak Nifty PSU Bank ETF, with its one year returns of 51.05%, the Nippon India ETF Nifty PSU Bank BeES, which gives 51.05% returns for a year, the ICICI Prudential Nifty FMCG ETF which gives you 26.63% returns, the ICICI Prudential Bharat 22 ETF with 23.70% returns, etc.

Best ETFs for investment in India:

Best ETFs to invest in India (7)

(Source: https://www.mutualfundindia.com)

Looking at ways to kickstart your investments? Get inspired with helpful reads here.

Exchange Traded Funds (ETFs) – FAQs

1) What is an Exchange Traded Fund (ETF)?

An Exchange Traded Fund (ETF) is a financial security that tracks or replicates the performance of an underlying asset. The underlying asset can be an equity index, gold, or other commodities, bonds, etc. The ETF mirrors the performance of the underlying asset, also known as the benchmark. If the benchmark is an index, say, Nifty 50, the ETF invests in all the index securities as per their weightage in the index.]

2) What are the different types of ETFs available in India?

Types of ETFs available in India include equity ETFs, gold ETFs, debt ETFs, and international ETFs.

  • Equity ETFs: An equity ETF tracks the performance of an equity index. The index can be the Nifty 50 (e.g. SBI ETF Nifty 50), a broader index such as Nifty Midcap 150 (e.g. Nippon India ETF Nifty Midcap 150), a sectoral index such as Nifty Bank (e.g. Kotak Banking ETF), or a thematic index such as Nifty India Consumption (e.g. Nippon India ETF Consumption), etc.
  • Commodity ETFs: A commodity ETF tracks the performance of a commodity such as gold. Some examples of gold ETFs include Birla Sun Life Gold ETF, SBI Gold ETF, Axis Gold ETF, etc.
  • Debt ETFs: A debt ETF tracks the performance of a debt security. Some examples of debt ETFs include Bharat Bond ETF – April 2030 that tracks the performance of the Nifty Bharat Bond Index, LIC MF G-Sec Long Term ETF that tracks the performance of the Nifty 8-13 year G-Sec Index, DSP Liquid ETF that tracks the performance of Nifty 1D Rate Index, etc.
  • International ETFs: An international ETF tracks the performance of an index belonging to a foreign country. Some examples include MOSt Shares NASDAQ 100 that tracks the Nasdaq 100 Index, Nippon India ETF Hang Seng BeES that tracks the Hang Seng Index.

3) What is the process of buying ETFs?

ETFs are offered by Asset Management Companies (AMCs). You can invest in ETFs either at the time of the New Fund Offering (NFO) or buy them directly from the secondary market.

  • New Fund Offering (NFO): The AMC offering the ETF announces the NFO dates. You can subscribe to the ETF by filling the application form. Once the NFO closes, the AMC will allot the ETF units.
  • Secondary market: Once the NFO closes and the allotment to subscribers is completed, the ETF units are listed on stock exchanges like BSE and NSE. The trading of ETF units happens during market hours, just like equity shares. You can buy the ETF units through your stockbroker by placing an order from your trading account.

4) Is a demat account required for ETFs?

Yes, a demat account is required for investing in ETFs. You can place a buy order from your trading account. During the settlement process, your trading/bank account will be debited with the transaction amount, and the ETF units will be credited to your demat account. For selling ETF units, you have to place the sell order from your trading account. During the settlement process, the ETF units will be debited from your demat account, and your bank/trading account will be credited with the transaction amount.

5) What are the key advantages of ETFs?

Let’s look at some of the main advantages of ETFs:

  • Low expense ratio: The expense ratio of ETFs is low as compared to active mutual fund schemes. For most active mutual fund schemes, the expense ratio will range between 1.5% and 2.5%. But for an ETF, the expense ratio is usually less than 1%.
  • Real-time price discovery: In the case of other mutual fund schemes, the net asset value (NAV) at the end of the day is applied to the units bought by you. But in the case of ETFs, the trading of units happens on a real-time basis during market hours. As soon as your transaction is executed, you will know the price at which it was done.
  • Diversification: ETFs like those based on broader indices such as Nifty 50 give you exposure to a basket of 50 stocks. The Nifty 50 stocks represent more than 20 different sectors of the economy. So, ETFs give you diversification, which is essential for every investor.
  • Low minimum investment: While buying and selling ETFs, the minimum number of units to be bought/sold is 1 unit. Hence, the minimum investment amount required for ETFs is very low and affordable to people across income categories.
  • No fund manager bias: In an active fund, the fund manager decides which securities to buy, how many to buy, when to buy, at what price to buy, etc. All these decisions are dependent on the fund manager. Human decisions can be biased and can influence the returns of the scheme in an adverse manner. However, in the case of an ETF with a benchmark such as Nifty 50, the fund manager has to invest the ETF money in all the Nifty 50 constituents as per their weightage. This removes ‘fund manager bias’ as they have no say in which securities to buy, how many to buy, when to buy, at what price to buy, etc.

6) What are some of the disadvantages of ETFs?

Even the best ETF in India have do come with some disadvantages:

  • Demat account needed: Investing in ETFs requires you to have a demat account, which is not the case with other mutual fund schemes. A demat account comes with account opening charges and annual maintenance charges. Also, for executing ETF buying and selling orders, you will have to pay brokerage.
  • Low liquidity: The trading volumes in the case of some ETFs are low. Due to low liquidity, when buying ETF units, you may have to pay a premium to NAV. Similarly, due to low liquidity, when selling ETF units, you may have to sell them at a discount to NAV.
  • No SIP mode of investment: In the case of active mutual fund schemes, you can invest in them through systematic investment plans (SIPs). But in the case of ETFs, the SIP mode of investment is not available. Whenever you want to invest in ETFs, you have to buy the units from the market by placing an order from your trading account.

7) What are the factors one should consider while investing in an ETF?

Here are some key factors you should consider while investing in ETF funds:

  • Expense ratio: When choosing between two ETFs with the same benchmark, say Nifty 50, you should give preference to the ETF with a lower expense ratio. The general rule is, the lower the expense ratio, the better.
  • Tracking error: The returns given by an ETF may not exactly match the returns given by the benchmark. It happens because the fund manager may keep some cash to meet daily operations. The difference between the benchmark returns and the ETF returns is known as tracking error. When choosing between two ETFs with the same benchmark, say Nifty 50, you should give preference to the ETF with a lower tracking error. The general rule is, the lower the tracking error, the better.
  • Assets Under Management (AUM): You should ideally choose an ETF with a higher AUM. Bigger schemes may be subject to lower volatility. However, you should always give more preference to expense ratio and tracking error than AUM while choosing ETFs for investment.

8) What are some of the ETFs, based on various indices, that are available for investment in India?

Here is a list of some best ETF funds in Indiabased on various indices, available for investment in India:

Best ETFs to invest in India (8)Best ETFs to invest in India (9)Best ETFs to invest in India (10)Best ETFs to invest in India (11)

(Source:NSE Passive Investing Quarterly Update)

Note:The AUM is as of August 2022

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    etf

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Best ETFs to invest in India (2024)

FAQs

Best ETFs to invest in India? ›

Motilal Oswal Nifty Midcap 100 ETF has given a return of 36.69% in three years. This ETF tracks NIFTY Midcap 100 Total Return Index, which has given a return of 37.74% in this duration.

Which ETF gives highest return in India? ›

Motilal Oswal Nifty Midcap 100 ETF has given a return of 36.69% in three years. This ETF tracks NIFTY Midcap 100 Total Return Index, which has given a return of 37.74% in this duration.

Is investing in ETF a good idea in India? ›

ETFs have a much lower expense ratio compared to mutual funds. Indian mutual funds have an expense ratio in the range of 2.5%-3.0% whereas an ETF will have an expense ratio of less than 1%. Also, unlike an equity fund or an index fund, the ETFs are traded like stocks between buyers and sellers.

Which ETF is most profitable? ›

100 Highest 5 Year ETF Returns
SymbolName5-Year Return
IWFiShares Russell 1000 Growth ETF14.15%
MOATVanEck Morningstar Wide Moat ETF14.04%
SPXLDirexion Daily S&P 500 Bull 3X Shares14.04%
OMFLInvesco Russell 1000 Dynamic Multifactor ETF13.98%
85 more rows

Is ETF good for long term investment in India? ›

ETFs are less volatile than stocks, so they do not give very high returns in a short period and similarly do not fall rigorously like stocks. ETFs are only for those who want slow and steady returns in the long term. For anybody expecting good returns overnight, an ETF is not a good option for you to invest in.

Are ETF risky in India? ›

ETFs are also exposed to the underlying asset risks. For example, if you invest in a bond ETF, your ETF will also be exposed to credit and interest risks.

Which Indian ETF pays dividends? ›

1. Current NAV: The Current Net Asset Value of the Nippon India ETF Nifty Dividend Opportunities 50 as of Jun 16, 2023 is Rs 52.85 for IDCW option of its Regular plan. 2.

Is ETF taxable in India? ›

In case of equity ETF, capital gains made on short-term investments are taxed at flat 15% and in case of long-term ones, the gains made from ETFs and listed equity shares taken together during a year are taxed at a flat rate of 10% after an initial exemption of Rs. 1 lakh.

Is ETF better than MF? ›

ETFs and index mutual funds tend to be generally more tax efficient than actively managed funds. And, in general, ETFs tend to be more tax efficient than index mutual funds.

Which is better ETF or MF India? ›

Mutual Funds vs ETF: The Difference

ETFs can be actively bought and sold on exchanges, similar to individual stocks. Mutual fund units can generally be purchased from the fund house or through authorised intermediaries. ETF units can be purchased and sold anytime during the market hours, at the prevailing market price.

Has anyone gotten rich from ETFs? ›

Can ETFs really make you rich? In a nutshell: Yes, ETFs alone are enough to make you rich. With just one investment, you can capture the growth of the overall stock market or a certain segment of it. For example, you can find ETFs that focus on pretty much any industry, investment theme, or region of the globe.

Can I invest $1,000 in an ETF? ›

The Bottom Line. With many available options, investors can use $1000 to purchase ETFs, stocks, or bonds. Simply paying off outstanding debt may save money in interest payments over time and prove to be a wise investment.

What is the most aggressive ETF? ›

Aggressive Growth ETF List
Symbol SymbolETF Name ETF NameESG Score Global Percentile (%) ESG Score Global Percentile (%)
VUGVanguard Growth ETF60.45%
IWFiShares Russell 1000 Growth ETF68.15%
VGTVanguard Information Technology ETF82.69%
XLKTechnology Select Sector SPDR Fund88.82%
4 more rows

Do ETF pay dividends? ›

There are 2 basic types of dividends issued to investors of ETFs: qualified and non-qualified dividends. If you own shares of an exchange-traded fund (ETF), you may receive distributions in the form of dividends. These may be paid monthly or at some other interval, depending on the ETF.

How long can you hold an ETF? ›

Holding period:

If you hold ETF shares for one year or less, then gain is short-term capital gain. If you hold ETF shares for more than one year, then gain is long-term capital gain.

Why not invest in ETFs? ›

Market risk

The single biggest risk in ETFs is market risk. Like a mutual fund or a closed-end fund, ETFs are only an investment vehicle—a wrapper for their underlying investment. So if you buy an S&P 500 ETF and the S&P 500 goes down 50%, nothing about how cheap, tax efficient, or transparent an ETF is will help you.

Which sector is safest to invest in India? ›

(Updated on 05-May-2023)
SLIndustrySector
1Exchange ServicesServices
2Housing FinanceFinancial
3SIDCs/SFCsFinancial
4Two & Three WheelersAutomobile
6 more rows
May 5, 2023

Why ETF is not popular in India? ›

Costs are low but not enough: ETFs globally have a low-cost structure while in India the cost is little higher. If you add brokerage costs the costs go up further. 5. Lack of Awareness: Because of low margins, not enough has been done to make ETFs popular amongst investors in India.

What happens if an ETF closes in India? ›

ETF Is Delisted and Liquidated

Delisting means that the ETF can no longer be traded on the exchange. Sponsors normally liquidate ETFs shortly after they are delisted and investors receive the market value of the investments.

Can Indians invest in Vanguard ETF? ›

Indian investors can buy S&P 500 Vanguard ETF (VOO) through the following modes: Direct investment: One can invest through opening an International Trading Account with Angel One. Once account is opened, you can add funds in U.S. dollars to buy S&P 500 Vanguard ETF (VOO).

Will I get dividend if I buy ETF in India? ›

Dividends are shares of the profits received by the shareholders (equity scheme) of a company. Typically in India, ETFs (exchange-traded funds) don't pay out dividends to the investors. Instead, the proceeds received from the underlying securities are reinvested back into the scheme.

Which Indian share gives highest dividend? ›

List of Top Highest Dividend Paying Stocks In India 2023
CompanyDividend %Dividend (INR)
NTPC Ltd.42.54.25
HCL Technologies Ltd.90018.00
REC Ltd.32.53.25
Hindustan Zinc Ltd.130026
20 more rows

Which gold ETF is best in India? ›

Best Gold ETFs in India
  • HDFC Gold ETF.
  • SBI Gold ETF.
  • IDBI Gold ETF.
  • Axis Gold ETF.
  • Kotak Gold ETF.
  • Aditya Birla Sun Life Gold ETF.
  • Nippon India Gold ETF.
  • Invesco India Gold ETF.
May 18, 2023

How do I avoid taxes on my ETF? ›

One common strategy is to close out positions that have losses before their one-year anniversary. You then keep positions that have gains for more than one year. This way, your gains receive long-term capital gains treatment, lowering your tax liability.

What are the charges on ETF in India? ›

Brokerage, STT, and Other Charges

Your broker also charges certain fees for its services, called brokerage charges. The average brokerage charge on purchasing ETFs is 0.01% of the turnover value. There are certain charges that the SEBI levies on the purchase of stocks from an exchange.

What are 3 disadvantages to owning an ETF over a mutual fund? ›

So it's important for any investor to understand the downside of ETFs.
  • Disadvantages of ETFs. ETF trading comes with some drawbacks, which include the following:
  • Trading fees. ...
  • Operating expenses. ...
  • Low trading volume. ...
  • Tracking errors. ...
  • Potentially less diversification. ...
  • Hidden risks. ...
  • Lack of liquidity.

What's the best ETF to buy right now? ›

7 Best ETFs to Buy Now
ETFYTD performance as of June 2
Ark Innovation ETF (ARKK)33.2%
Global X MSCI Greece ETF (GREK)28.8%
Pimco Enhanced Short Maturity Active ETF (MINT)2.5%
iShares Gold Trust (IAU)6.8%
3 more rows

Should I convert my mutual fund to an ETF? ›

If you're paying fees for a fund with a high expense ratio or finding yourself paying too much in taxes each year because of undesired capital gains distributions, switching to ETFs is likely the right choice for you.

Should I invest in ETF or index fund India? ›

Difference Between Index Funds And ETFs

So, you can invest in an index fund just like any other mutual fund but you will need a DEMAT account to invest in an ETF. This is the basic difference between the two instruments. If you are somebody who doesn't have a DEMAT account then index funds are the option for you.

Can I invest in ETF through SIP? ›

The units of these ETFs can be bought or sold at the stock exchange where it is listed on a real-time basis. Investing in physical gold requires large amounts of money, whereas Gold ETFs allow investments in small denominations through Systematic Investment Plans (SIPs).

Which is better Nifty ETF or Nifty Index Fund? ›

But when you compare between ETFs and Index Funds, ETFs tend to be cheaper than Index Funds in most scenarios. For example, the HDFC NIFTY 50 ETF comes at an expense ratio of just 0.05%, while the Index Fund variant, i.e., the HDFC NIFTY 50 Index Plan, has an expense ratio of 0.20% for its direct variant.

What does Warren Buffett say about ETFs? ›

There's a good reason why Buffett has long recommended the S&P 500 ETF: Not only can it see significant earnings over time (sometimes more than actively managed funds), but it's also one of the safest investments out there.

Can you retire a millionaire with ETFs alone? ›

Fortunately, the short answer is "Yes, you can!" Because of the way ETFs are structured, though, there is one thing you will have to plan around. If you expect to use ETFs as a key part of your retirement plan, you need to recognize when you'll need the money and invest it appropriately for that timeframe.

Can I make a living off ETFs? ›

Some exchange-traded funds, or ETFs, can provide a potential income stream that may offer more diversification than investing in just one stock. Whether you're reorganizing your portfolio for your golden years or just starting to research income-oriented funds, you might want to consider this investment type.

How to turn $1,000 into $10,000 in a week? ›

The Best Ways To Turn $1,000 Into $10,000
  1. Retail Arbitrage. Have you ever bought something and then resold it for a profit? ...
  2. Invest In Real Estate. ...
  3. Invest In Stocks & ETFs. ...
  4. Start A Side Hustle. ...
  5. Start An Online Business. ...
  6. Invest In Small Businesses. ...
  7. Invest In Alternative Assets. ...
  8. Learn A New Skill.
Mar 6, 2023

Where to invest $10,000 right now? ›

5 ways to invest $10,000
  • Fund an IRA. One of the most popular ways to invest $10,000 is funding an individual retirement account. ...
  • Invest in mutual funds or ETFs. Investing in mutual funds or exchange-traded funds is another option for your $10,000. ...
  • Buy stocks. ...
  • Buy bonds. ...
  • Invest in REITs.
May 3, 2023

Is 30 ETFs too many? ›

Holding too many ETFs in your portfolio introduces inefficiencies that in the long term will have a detrimental impact on the risk/reward profile of your portfolio. For most personal investors, an optimal number of ETFs to hold would be 5 to 10 across asset classes, geographies, and other characteristics.

Which ETF has lowest risk? ›

1. Vanguard S&P 500 ETF (VOO -0.37%) Legendary investor Warren Buffett has said that the best investment the average American can make is a low-cost S&P 500 index fund like the Vanguard S&P 500 ETF.

Can ETFs beat the market? ›

Advantages of investing in ETFs

A well-diversified ETF such as one based on the S&P 500 can beat most investors over time, making it easy for regular investors to do well in the market. ETFs tend to be less volatile than individual stocks, meaning your investment won't swing in value as much.

How do I choose an ETF? ›

The key liquidity factors are:
  1. The underlying securities of the ETF - highly tradable are better.
  2. Fund size - larger tends to be better.
  3. Daily trading volume - more tends to be better.
  4. Market makers - more is better.
  5. Market conditions - liquidity can decline when the markets are very volatile.

How to get $500 a month in dividends? ›

How To Make $500 a Month in Dividends
  1. Choose a desired dividend yield target.
  2. Determine the amount of investment required.
  3. Select dividend stocks to fill out your portfolio.
  4. Invest in your dividend income portfolio regularly.
  5. Reinvest all dividends received.
Jun 5, 2023

What is the largest dividend ETF? ›

Top 100 Highest Dividend Yield ETFs
SymbolNameDividend Yield
FLRUFranklin FTSE Russia ETF24696.43%
SOGUAXS Short De-SPAC Daily ETF82.77%
PYPTAXS 1.5X PYPL Bull Daily ETF55.75%
KBAKraneShares Bosera MSCI China A 50 Connect Index ETF54.31%
91 more rows

Can you live off ETF dividends? ›

For many retirees, dividend-paying stocks and ETFs provide income without a job. Often, they are for those who do not have time to monitor the market every second. They are suitable long-term investments since payouts are constant.

Do you pay taxes on ETFs? ›

The IRS taxes dividends and interest payments from ETFs just like income from the underlying stocks or bonds, with the income being reported on your 1099 statement. Profits on ETFs sold at a gain are taxed like the underlying stocks or bonds as well.

What is the 7 day ETF rule? ›

Availability and Scope of the ETF Rule

maintain their exchange listing may no longer rely on the ETF Rule and must satisfy individual redemption requests within seven days pursuant to Section 22(e) of the 1940 Act or liquidate if not listed on an exchange. See ETF Release at 61.

How often should I put money into an ETF? ›

The best time to buy ETFs is at regular intervals throughout your lifetime. ETFs are like savings accounts from back when savings accounts actually paid you interest. Think back to a time when you (or your parents!) used to invest in your future by putting money into a savings account.

Are ETFs good for beginners? ›

Are ETFs good for beginners? ETFs are great for stock market beginners and experts alike. They're relatively inexpensive, available through robo-advisors as well as traditional brokerages, and tend to be less risky than investing individual stocks.

Is ETF good for long term in India? ›

ETFs are less volatile than stocks, so they do not give very high returns in a short period and similarly do not fall rigorously like stocks. ETFs are only for those who want slow and steady returns in the long term. For anybody expecting good returns overnight, an ETF is not a good option for you to invest in.

What is the primary disadvantage of an ETF? ›

Costs Could Be Higher

Most people compare trading ETFs with trading other funds, but if you compare ETFs to investing in a specific stock, then the costs are higher. The actual commission paid to the broker might be the same, but there is no management fee for a stock.

Which ETF gives best returns? ›

India's Top ETFs to Invest in for 2023
Index ETFsGold ETFsBond ETFs
Motilal Oswal NASDAQ 100 ETFIDBI Gold ETFNippon ETF Long Term Gilt
HDFC Sensex ETFInvesco India Gold ETFSBI-ETF 10Y Gilt
SBI ETF SensexAditya Birla Sun Life Gold ETFLIC MF Government
Edelweiss ETF - NQ30SBI ETF GoldNippon ETF Liquid BeEs
1 more row
May 11, 2023

Which ETF has highest growth? ›

Compare the best growth ETFs
Fund (ticker)Expense ratio10-year return as of March 31
Invesco QQQ Trust (QQQ)0.20%17.70%
Vanguard Growth ETF (VUG)0.04%13.61%
iShares Russell 1000 Growth ETF (IWF)0.18%14.38%
iShares S&P 500 Growth ETF (IVW)0.18%13.42%
3 more rows
Jun 1, 2023

Which mutual fund gives 12% return? ›

personal finance
Sectoral FundsOne-year returns (in %)
Tata Banking and Financial Services Fund – Reg Growth12.50
UTI Banking and Financial Services Fund – Growth12.00
Aditya Birla Sun Life Infrastructure Fund – Growth12.00
Source: SMC
9 more rows
Dec 6, 2022

What is the safest investment with the highest return in India? ›

Fixed deposit

Fixed deposit (FD) is often hailed as one of the most stable and safe investment with high returns in India. It is advisable to invest in fixed deposit because of the following reasons: Accumulate higher returns by availing FD schemes from credible financiers.

Is Vanguard S&P 500 ETF a good investment? ›

Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.

Is ETF better than mutual fund? ›

ETFs can be more tax-efficient than actively managed funds due to lower turnover and fewer capital gains. ETFs are bought and sold on an exchange at different prices throughout the day while mutual funds can be bought or sold only once a day at one price.

How many ETFs should I invest in? ›

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.

What is the largest USD ETF? ›

The largest U.S. ETF is the SPDR S&P 500 ETF Trust SPY with $412.52B in assets.

What if I invest $10,000 in mutual funds for 5 years? ›

If a SIP of Rs 10,000 had been started in it 5 years ago, today this amount would have been Rs 12.72 lakh. The fund has given an annual return of 30.62 percent in these five years.

How do I get 15% return? ›

Best way to get 15% p.a. on your investment
  1. Direct equity. Buying a part of a company from the stock market can prove beneficial because the company is growing, causing your investments to multiply. ...
  2. Real estate. ...
  3. Gold. ...
  4. Equity mutual funds. ...
  5. Debt mutual funds. ...
  6. PPF. ...
  7. FD.

What if I invest $10,000 in mutual fund? ›

Even a small investment of Rs. 10,000 in mutual funds can generate substantial returns over a long investment period. The returns will be dependent on various factors like the choice of fund, market trends, and the performance of the particular scheme.

Where to invest 100k in India? ›

Here are some of these options:
  • Recurring Deposits. Recurring deposits come with the flexibility to invest an amount every month. ...
  • Money Market Account. It is an interest-bearing account at a bank or a credit union. ...
  • Debt Instruments. ...
  • Bank Fixed Deposits. ...
  • Post- Office Time Deposits. ...
  • Large Cap Mutual Funds. ...
  • Corporate Deposits.

How can I double my money without risk? ›

5 Ways to Double Your Money
  1. Take Advantage of 401(k) Matching.
  2. Invest in Value and Growth Stocks.
  3. Increase Your Contributions.
  4. Consider Alternative Investments.
  5. Be Patient.
Nov 1, 2022

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