If you have read the coffee can investing the book talks about why an etf is better than a large cap fund . This is especially true now that the large cap world has been defined as the top 100 stocks in the country.
Basically the etf is a passive investing option where the etf tracks the nifty or the sensex. Usually the tracking is accurate to the high 90%. Some gaps remain due to additional funds or redemption which the etf manager needs to manage. Because of the passive nature of the fund this yield the cost of management to be very low.
When you compare that to the large cap funds the cost of management or the TER ratio is in the range of 2% every year of your NAV.
Now if you believe that the alpha ( ie the difference between the active fund and the passive fund) is very low then the gap in the TER is actually a fillip to your returns over a long term period... and this 2% gap can give significant jump your returns over a 25 or 30 yr period ( i will give the exact details in another post).
So nowdays a lot of people are actually propagating people to go for etf vs large cap funds.
I think it makes lots of sense...
Its simplefinancialsense
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