Money Guru: Why ETFs are good for new investors; Which ETFs to invest in? Swati Raina decodes with Mrin Agarwal

ETF or exchange-traded fund is basically a passive investment strategy that follows a particular index. But why ETFs are good for new investors and which ETFs to invest in? Swati Raina discussed this with expert Mrin Agarwal, Founder Director of Finsafe India Pvt Ltd, on the popular TV show 'Money Guru'.

Why ETFs are good for new investors?
Agarwal said an exchange-traded fund (ETF) is a low-cost investment and easy to invest in different sectors. It is very good for new investors and there are many reasons for that like it is easy to keep track of trading and selling prices and everyday investment information creates transparency. It is also easy to sell and the most notable point is that its dividend is tax-free.

The expert added it is very easy for investors to invest in these funds and low-cost investment is an added advantage.

Is ETF is safe to invest in?
The expert said all the equity market funds whether it is ETFs, index, or active funds, are investing in the equity market. Hence there will be the risk of the equity market in it. It is not that ETF or index funds are safer than other mutual funds.

What are the types of ETFs?
Agarwal said there are three types of ETFs:
Debt ETF,
Gold ETF and
Silver ETF.

Which ETFs to invest in?
The Director of Finsafe suggested investing in index funds like Nifty50, Nifty next50, Nifty midcap 150, and also BSE Sensex's funds. If you are a new investor then you should first invest in index funds and not stocks, said Mrin Agarwal, because this is low cost and also a good way to get the experience of the stock market as well. So, those who are new investors should first invest in large-cap indices like Nifty50, Sensex.

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