Ask ETFs and Indexing queries here

Hey guys,

If you have any query related to ETFs (exchange traded funds) and Indexing which you want to ask, you can ask right here and i will surely get back to you in the fastest way possible

I am really excited about spreading the knowledge which i have gathered on ETFs and Indexing. So if you have anything to ask on it just put it here instead of creating threads for the same.

Shoot it :thumb:

Hello!
I invest in MFs as a 'DIRECT' investor.
I also have a DMAT+Trading Acc wid India Infoline.
I want to invest in Index Funds. Kindly tell the exact procedure- step by step?
Apart from Sensex, Nifty, banking-bees; can one invest in other Index Funds also? plz describe in detail!
Thanks in advance!
rm420

I suggest to go for Benchmark BeES an Exchange Traded Funds(ETFs) which are index funds and traded just like stocks, since you already have a demat and trading account its very convenient to buy/sell them and ETFs are very transparent, convenient and cost efficient as compared to any other index funds.

you have Nifty BeES and Junior BeES which tracks top 50 and next top 50 shares respectively, beside this you also have Bank BeES, PSU Bank BeES which tracks banking sector index, Gold BeES which is a Gold fund and tacks the price of approx. 1 gram of physical gold and Shariah BeES for shariah index which invests in stocks permissible by Islamic law.

For trading you need to login to your trading account and put the initials of the scheme name in the find stock section( ETFs come under Stocks section) and select the select the scheme you select, you can visit to www.benchmarkfunds.com for real time NAV of these ETFs

What role should ETFs and other index products play in the portfolios of private investors?

what are brokerage and intraday and dilevery difference if there is any

what are additional charges and differ from MF n brokerage house

Can one trade midcap index/auto index/pharma index?

rm420

Indexing in the recent times has been fast catching up amongst investors and the reason for this is the last years dismal performance by most of the actively managed funds, I came across an interesting study done by benchmark mutual fund called myth of eternal alpha(Google it) which brings out surprising fact that nearly 80% of the actively managed funds in India have underperformed the benchmark and that explains why ETFs are gaining popularity. Did you know that globally too 85% of the fund managers have underperformed the index in the last 20 years. Warren Buffet, probably the worlds most accomplished investors speaks about index investing in most of his newsletters to investors.

Its always advisable to invest some portion if not all in index funds via ETFs like Bank Nifty BeES, Junior BeES, and Gold BeES. Also, you can diversify your core equity holding with just a single unit and align the returns to the index at the same time you are spreading risk across the index.

Form Mid cap you can have a look at Benchmark S&P CNX 500 fund which tracks 500 midcap companies including Pharma and Auto companies, it constitutes of about 95% of the market cap and is also known and total market index. I have also heard that they have introduced Value Averaging Plan (VIP) plan on this fund which is first of its kind in India and a better plan as compared to SIP.

In VIP you invest more when the markets are down and less when they are high unlike SIP where your installment is fixed irrespective to market condition. I strongly recommend you to have a look at it.

Cheers!

About LiquidBeEs

Am hoping that you can provide some inputs of LiquidBees...

1. How are they useful?
The Using Liquid BeEs effectively article is not correct today as online money transfer mitigates any cheque writing hassle to the broker. Further, the brokerage/taxes of a LiquidBeEs buy/sell eats away any short term gains from them.

2. Amount/frequency of dividend?
What is the typical dividend expectation in comparison to a short term Fixed Deposit? Is there any periodic bonus or something like that? How frequently is dividend credited?

3. What does one do with fractional units?
The literature says that they can be sold to Benchmark; is that a convenient procedure?

As a backdrop, had bought 60 LiquidBeEs some time back and the DP shows 60.126 units. The dividend increased twice I think, once a week. Not very sure as I forgot to track it which was the sole purpose of buying them in the first place.