You can do that. Yes, broad indices should have better liquidity. Btw, do check this as well – https://youtu.be/DeGzj9BJmcY?si=IyYeF20shLi6ZPkO

I’m investing in Nifty 50 and Nifty next 50 index funds. These are popular indices and liquidity shouldn’t be an issue in this case. Am I right here?

If above statement is right, I can stop the SIP mutual fund, withdraw the money and put it in ETFs instead and I can create SIP for those ETFs right?

I’m so confused here. Please enlighten me on this Karthik. Thanks!

Yes, you can. Check this – https://support.zerodha.com/category/trading-and-markets/kite-web-and-mobile/others/articles/kite-sip-order

Hi Gautam, yes, you can create SIPs and invest in it with the same discipline. Nothing wrong with it. Yes, the expense ratio is lower with the ETF. Few reasons why people dont invest in ETFs much –

1) Awareness
2) Liquidity issue
3) Tracking error.

Otherwise, ETF is a good choice.

I would like to know whether similar option (creating SIP for stocks / ETFs) is available in Zerodha app too.

I have gonethrough your modules and sort out the list of funds that im going to invest successfully and i started my investment journey 6 months ago.

My portfolio includes 2 index mutual funds. Im using Groww app to handle my investment. I noticed that there is an option to create SIP for stocks in Groww app.

AMCs have index ETFs and index mutual funds. If I can create SIP for index ETFs, that would be more beneficial than investing in index mutual funds right? because the expense ratio for ETFs are less compared to their mutual funds.

if we have an option like this, then everyone can just skip mutual fund and just create ETF SIP right? what is stopping everyone to do this? Am I missing something here?

Also, I need your guidance on whether to stop index mutual fund investment and start SIP for index ETFs instead (I have invested for the past 6 months till now).

Cheers, good luck!

For someone starting new, ETF makes sense. In most cases, ppl would have started SIPs in Index fund long back, shifting to ETF will be a pain, hence they continue in MFs only 🙂

I want to invest (over a long horizon) in an instrument that tracks the Nifty 50 index, and I’m really struggling to understand why one would ever choose a Nifty 50 Index Fund over something like the Nifty Bees ETF.

Nifty Bees has much lower TER (as opposed to common/popular Nifty 50 Index Funds)
Due to its popularity, Liquidity does not seem to be an issue with Nifty Bees, unlike some other less common ETFs
The tracking error is pretty good, especially considering a long investment horizon.
I get to invest at a price close to the live price, i.e. iNAV unlike an Index Fund where I get assigned the end of day NAV

I have seen a few arguments in favor of Index Funds like redemption of units not being an issue since the AMC maintains a reserve (unlike ETFs where we need to find a seller). However for a popular ETF like Nifty Bees I doubt that selling units at a fair price(or close to the fair price) would be an issue.

Could you please help me understand what I might be missing here?

If its in India, it is market cap weighted anyway 🙂

Thanks for your courses. I would like to know your opinion on ‘Equal weighted’ vs ‘Market cap weighted’ index funds for long term investment goals like retirement.

Cheers, good luck!

Hey wait, I thought your question was – what happens if NAV goes up after you purchase units. So naturally, your investment value increases.

Yes, when you buy or add more to an existing mutual fund, the NAVs increase. Unlike in stocks, the NAV wont decrease if someone sells.