Today, investors have a lot of options for investments. Exchange Traded Funds (ETFs) and mutual funds both invest in a mix of securities – stocks, bonds, or gold – as per the fund’s investment theme. However, what is the difference between ETF and mutual funds? Will ETFs give better returns than MFs? Where is the most advantage in investing? Money 9 Helpline hosted Certified Financial Planner Surya Bhatia to help you understand which one you should choose between ETFs and mutual funds.
Bhatia: Your question has two parts. For part 1, I do not totally agree with you. You will get better value on ETFs. The expense ratio is less in ETF, so per unit you will get more value. Mutual in FoF is better for a working person because you need not track. If you have time and can track then go for ETFs.
For your second part, I would say that yes today investors want to diversify and have a global allocation of portfolios. You can keep 10-15% of portfolio on international funds. S&P is good fund in that respect.
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