AgenciesI started investing in Nippon India ETF Shariah BeES, whose AUM is around Rs 7 crores. Can you let me know if the liquidity from an ETF will have any effect in the long term investment? Can I continue my monthly SIP in the ETF Shariah BeEs for 5-10 years?
--- Imara Hasnain
Chokkalingam Palaniappan, Director, Prakala Wealth, a wealth management firm based in Chennai responds:
While investing in ETFs, liquidity is an important factor. When liquidity is low, price discovery will be less. Even though you invest for the long term, if the ETF does not grow in asset size, liquidity could be an issue when you want to sell. This particular scheme was started in the year 2009 – however, till now the asset base is low. Hence, you may think of switching at least a part of your SIP to Tata Ethical Fund which is also a shariah compliant fund.
--- Imara Hasnain
Chokkalingam Palaniappan, Director, Prakala Wealth, a wealth management firm based in Chennai responds:
While investing in ETFs, liquidity is an important factor. When liquidity is low, price discovery will be less. Even though you invest for the long term, if the ETF does not grow in asset size, liquidity could be an issue when you want to sell. This particular scheme was started in the year 2009 – however, till now the asset base is low. Hence, you may think of switching at least a part of your SIP to Tata Ethical Fund which is also a shariah compliant fund.
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
Read More News on
Download The Economic Times News App to get Daily Market Updates & Live Business News.