4 Tips for Choosing the Right ETF

Tip 1: Check which index it is mimicking

We suggest going for ETFs that track Nifty or Sensex. Other indices are risky.

Tip 2: Check ETF’s expense ratio

The lower the expense ratio, the better it is.

Tip 3: Check ETF’s tracking error

There is a tiny difference between ETF returns and the index it tracks. So, choosing an ETF with a lower tracking error is best.

Tip 4: Check ETF’s liquidity

Some ETFs are not popular, meaning they can’t be bought and sold easily. So, choose an ETF that has a high trading volume.