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Which is a better option to invest in the index - Nifty BeES or index funds?

Dhirendra Kumar suggests the right fund for a hassle-free investment

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If I want to invest in the index, shall I go with SIP of index funds or Nifty BeES? Which one would be a better choice?
- Kiran

For any common investor, investing via open-end mutual fund SIP is comparatively easy. In Nifty BeES or any kind of ETF, there is no option to give a standing instruction to do a systematic investment at a particular date like in the case of SIP. They trade like a share and quite often there is inefficiency as ETF tends to trade at above or below NAV.

So for a hassle free investment in Nifty, go with an index fund. And there are many Nifty index funds which are available at a very low expense ratio like 0.10-0.20 per cent. This is not a huge expense and also the ease of investing is a big plus point.

This article was originally published on June 25, 2021.

Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.

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