Nifty 50 ETF: Opportunity for higher returns on less investment, less risk of losing money

Investment: Investing directly in shares requires understanding the company’s financial position, its business prospects, valuation, industry dynamics, market conditions, etc.


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Nifty 50 ETF : Equity savvy people are often looking for the right investment opportunity. Equity has the potential to beat inflation in the long run, which is why people are more attracted to it. Apart from this, equity also has the potential to meet future financial needs. whether investment Mutual Fund done through or Direct Stock In or through a combination of both, but for new investors in equities, it is difficult to decide on the right company to start with straight away.

Investing in direct shares requires understanding of the company’s financial position, its business prospects, valuation, industry dynamics, market conditions, etc. For such investors, Nifty 50 ETF (Exchange Traded Fund) is the easiest way to invest. The ETF tracks a specific index, which is traded like a stock on the exchanges. ETFs are offered by mutual fund houses.

You can start with low investment

The special thing about Nifty 50 ETF is that it can be started with a very small amount. You can buy one unit of ETF for a few hundred rupees. For example- ICICI Prudential Nifty 50 ETF trades at Rs 185 on NSE. Thus you can invest up to Rs 500-1000 and buy units of Nifty 50 ETF from the exchange.

You can also make systematic investments every month. By doing this you will be buying at all levels of the market and your investment cost will be average. The tracking error of ICICI Prudential Nifty 50 ETF, which is a measure of the deviation of fund returns from an underlying index – of 0.03%, is the lowest in the Nifty 50 ETF universe. Simply put, the lower this number, the better.

Investing in big companies

The Nifty 50 index includes the largest Indian companies in terms of market capitalization. Hence investing in Nifty 50 ETF provides excellent diversification across stocks and sectors for an investor. It follows the path of the index. You can buy and sell units of ETFs from exchanges during market hours. Hence, Nifty 50 ETF is one of the starting points for first time stock investors and for those starting their equity journey in general.

Portfolio diversity reduces risk

A diversified portfolio minimizes the risk for an investor. This is not the case with investing in a stock, as market volatility can more adversely affect the price of a single stock than a basket of companies. The returns from investing in Nifty 50 ETF will mimic the volatility in the underlying index. You only need a demat account to invest in ETFs. Those who do not have a demat account can consider investing in Nifty 50 Index Fund.

investment is cheap

Investing in Nifty 50 ETF is relatively cheap. Since the ETF passively tracks the Nifty 50 index and there is limited or no churn across the index components, the cost is low. The expense ratio, or in other words, what funds charge is just 2 to 5 basis points (0.02-0.05%). One basis point is one hundredth of a percentage.

Opportunity to understand the market for years at low risk

By investing in Nifty 50 ETF, you can start understanding the market dynamics for years without taking too much risk. When you familiarize yourself with the various factors that drive the markets, you can spot small and midcap stocks or mutual funds based on your risk appetite, target, time frame and investable surplus . Thus you can start your journey of investing in the market through Nifty-50 ETF.

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English News Headline : Nifty 50 ETF Opportunity for higher returns on less investment.

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