ETFs offer a lot of benefits, making them an attractive option for Indian investors across various age groups and financial backgrounds.
Here are some reasons why ETFs should be a cornerstone of your investment strategy:
Diversification:
By investing in an ETF, you gain exposure to a broad range of securities, which helps in spreading risk.
For example:
Investing in a sectoral ETF allows you to benefit from the performance of an entire sector rather than relying on the fortunes of a single company.
Cost-Effectiveness:
ETFs typically have lower expense ratios compared to mutual funds because they are passively managed.
This means that a significant portion of your returns is not eaten away by management fees.
Liquidity:
Being traded on stock exchanges, ETFs offer high liquidity, allowing you to buy and sell units throughout the trading day at market prices.
This is particularly beneficial for investors who value flexibility and timely execution of trades.
Transparency:
ETFs disclose their holdings daily, giving investors clear visibility into the underlying assets.
This level of transparency helps investors make informed decisions and ensures that the ETF is aligned with their investment goals.
Accessibility:
With the start of online trading platforms and mobile apps, investing in ETFs has become highly accessible.
Whether you are a seasoned investor or a beginner, you can easily add ETFs to your portfolio with just a few clicks.