One of my friends was asking me . How to get returns in proportion to index ( Sensex/ NIFTY,etc).?
The simplest answer would be buy the index stocks in the same proportion that the index is made of . You can also choose to invest in index funds which try to closely track the composition of index in their portfolio.
There are also exchange traded index funds like NIFTY BEES , JUNIOR BEES and so on. These ETFs can be bought and sold just like stocks.
I know a friend of mine who is used to buying units ( very small quantity) from such an ETF every week (cost price averaging). He would also do value cost averaging by buying more Index fund ETF units on the day when ETF falls apart from his regular buying. This has helped him a lot and he is sitting on huge profits when the sensex is at a great height now....
Sounds like a smart strategy..you can try it out too!.
ETF- Exchange Traded Funds.
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