Let’s find the best Nifty Index ETF to invest in 2020 based on the very critical factor which is the average traded volume of the ETF.
NIFTY, as an index, was doing much better in 2019. So let’s find the best NIFTY Index ETF fund to invest in 2020.
When evaluating Index-based ETF funds, one has to look for the one that is best able to replicate the index and has a higher volume to execute the trades when one wants to enter as well as exit.
Exchange-Traded Funds or ETF, unlike mutual funds, require a demat account and are traded like stocks. Mutual funds try to beat the index, whereas ETF replicates the index. Know all about ETF’s here.
Index funds aren’t to outperform or underperform the underlying index. So all the Index ETFs will have the same performance over some time with almost no variation (or very slight variation) to the index.
Available Nifty Index ETF in 2020
The vital criterion to select the best Nifty Index ETF to invest in is the average traded volume for the ETF. If the average traded volume is meager, when you want to buy, you may end up paying a lot more because of the lesser number of sellers available. Similarly, when you want to exit, the same may happen on the downside.
We will use the NIFTY 50 Index ETF and have the following ETF’s.
| Nifty Symbol |
Average Traded Volume*
|
| NIFTYEES | < 500 |
| ICICINIFTY | ~ 50,000 |
| KOTAKNIFTY | ~ 50,000 |
| M50 | < 1000 |
| QNIFTY | < 500 |
| RELGRNIFTY | < 500 |
| SETFNIFTY | < 500 |
| UTINIFTETF | < 500 |
| BSLNIFTY | < 500 |
| NIFTYBEES | > 500,000 |
*Average traded volume data is per NSE Website. You can click the link in the table to visit the NSE website and check the traded volume for the ETF for the day.
The Best Nifty Index ETF Fund 2020
We should choose a Nifty Index ETF that has the maximum volume with minimum possible expense ratio. Only 3 Nifty Index ETF has considerable quantity. Out of this, NIFTYBEES has an expense ratio of 0.05% as per ValueResearchOnline. All others have a very high expense ratio.
Undoubtedly the best Nifty Index ETF fund to invest in 2020 is NIFTYBEES by Nippon India Mutual Fund.
Final Thoughts
As always, this isn’t a recommendation of any fund or ETF. The emphasis is on the process. The ETFs may be doing well now, but when you want to be investing, use the same process, and find the best ETF at that time to invest. Use ValueResearchOnline and NSE Website as and when you want to invest in 2020.
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