An ETF, or exchange-traded fund, is a way to track an index, an asset, or anything that is sold or bought on the stock market. The best part is that you can invest in this ETF, which does nothing but track these indexes or stocks already bought and sold. In this article, we will tell you more about these ETFs and we will give you a top 5 list of the best ETFs in India.
What is an ETF?
To make it easier to understand, we have chosen to determine the most important elements of an ETF. First of all, a business like India Casino could never be represented by an ETF. ETFs are usually made up of stocks, assets, or both, i.e., most things that can be traded on an exchange. You can have the S&P 500, which is one of the most successful indexes in the world because it represents the top 500 companies in the world.
Like stocks, an ETF can be traded on an exchange, just as stocks are, but more recently, on cryptocurrencies. Another extremely important element that defines ETFs is price fluctuation. The price is set in a very similar way to stocks. The more an ETF is traded, the higher or lower it’s price.
What can an ETF contain? An ETF can be made up of many things, but it includes stocks, bonds, commodities, holdings, and investments. All these are closely linked in an ETF whose price is dictated by its components and the number of units sold or bought in exchange.
ICICI Prudential Nifty ETF
Usually, when Indians want to invest in this ETF, they have some questions about the security of investing in the ETF, about its category, and how long they should keep their money in this investment. Well, the answers are pretty simple. This ETF is the most popular in India, and the latest studies on it have shown that it is one of the safest investments.
ICICI Prudential Nifty belongs to the Equity: Large Cap category of funds. If you want to invest in this fund, to ensure that inflation will not affect your money, your investment should be stuck for at least three years, so be careful.
Nippon ETF Nifty 100
The Nippon ETF is divided into several investment categories. There is the Nippon India ETF Bank, which includes the top 10 banks in India. There is the Nippon India ETF Junior, which includes the top 5 stocks in India, and the Nippon ETF Nifty, which is the ETF that comprises the top 100 most well-known and stable stocks. If you are planning to make an investment, you should consider this ETF.
Motilal Oswal NASDAQ 100 ETF
When you hear about NASDAQ, you don’t need any more introductions because most of the investments in this stock have been, are, and will continue to be safe. Why do we say that? Because this stock includes the largest companies in the world, internationally. Here we are talking about Apple, Microsoft Corp, Amazon, Tesla, Facebook, Alphabet, NVIDIA, and even Netflix.
How to Begin Investing in ETFs Safely
If we were to have faced the same question 10 years ago, the answers would not have been so good, but given that in 2021 there are many platforms where anyone can trade, the process is quite simple and could be carried out to the end by just about anyone. What is quite complicated now is staying safe with your investments.
Find a safe platform: You shouldn’t have to look too hard to find the best platform for investing in one of these ETFs. Most of the top platforms are already available online. You can use apps like Robinhood, and you won’t even have to pay fees for your transactions.
Find a suitable ETF: We have already given you 3 ETFs that you can trust the most, but if you want more options, you can try one of these:
Invesco India Nifty ETF
Quantum Nifty ETF (G)
Edelweiss ETF – NQ30
Make a strategy: Most people who are thinking of investing in ETFs are beginners because investing is something that has only started to be globalized in the last 10 years. What you want to do to invest as efficiently as possible is to have a strategy that will always help you buy at the best possible price and sell at the highest possible price. This method is called dollar-cost averaging and means that you always have to keep the money to buy, in case the price drops even more.
You need to be disciplined and never make an emotional decision. If it’s time to sell because you’re profitable, you can do it. And if the price has dropped and you’ve lost half your money, you should probably wait for it to rise.
We could talk to you about ETFs and give you some basic information on how to invest and what the best way to do it is, but it is important to keep in mind to never invest unless you have a plan.