Hi everyone, I’m new to investing and I see the term “investing in index funds” a lot. What does this actually mean?
Do I buy an ETF that tries to track the NIFTY50 or do I actively go and buy the stocks that make up the NIFTY50?
PS: My goal is to match NIFTY50 returns over the long term (20+ years)
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If you want to mirror the performance of nifty 50, you can simply invest in a nifty 50 index fund. For more information about index funds, you can read this. You can find ETFs listed on NSE here. You can also find index funds on our coin mutual funds platform.
Hi @ayush123, looks like you are really new to the market,
So, first of all, investing in all the components of an index and then watching the change and then rebalancing all of us would be a very complicated problem for any individual investor with the small amount of money that we have.
That’s why index funds and ETFs exist. The very basic difference between the two is that index funds work like mutual funds and you can buy them on nav but ETFs trade like stocks on NSE and BSE.
So if your aim is to match the returns of NIFTY50 over the long term, go for index funds rather than ETFs for the simple reason of impact cost, tracking error and liquidity.
There are many Nifty-50 Index funds like: Navi Nifty 50 index fund or HDFC Nifty 50 index fund
Recently Zerodha also launched an index fund: Zerodha Nifty LargeMidcap 250 Index Fund → This includes Nifty 100 and Nifty Midcap 150 (both 50-50)
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Investing in reliable ETF makes sense if you want to create margin for trading as well as achieve capital growth like nifty index. It is a low cost (expense ratio) option compared to an index fund.
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Hello
I want to expire by taking a covered call and hedge it with Nifty ETF or Index fund
My question-
The price of niftybees today is 244.96
change – +1.17 (0.48%)
Price of nifty today 22,123.65
Change +118.95 (+0.54%)
The % gain varies by 0.05 (Is this the actual deviation or the deviation of the EOD settlement?)
Now what amount of Niftybees should I buy to reflect the profit of ONE FUT Lot of nifty?
