InvestorQ : How is Nifty Low Vol 30 ETF for stable returns?
vani Patil made post

How is Nifty Low Vol 30 ETF for stable returns?

Anjali Desai answered.
10 months ago

Just because certain stocks are not as volatile as others, doesn’t in any way indicate that they will give consistent returns. ETFs will definitely fit in some portion of your whole portfolio. But you need to figure out the outcomes you want to chase. If you expect some shares to be less volatile, they could also be ones that give mediocre returns. Stocks inherently are risky.

The advantage of ETFs is that it holds a pre-determined basket of stocks which cannot be tampered with in any way while costing less than an equity mutual fund. It also tends to be more liquid than mutual funds. If you are someone who doesn’t want to go through the process of finding good stocks, getting access to a pre-determined basket of a stock portfolio, which tends to run parallelly to the index it's based on, is a boon.

But don’t expect the fund to give you consistent returns. There will be bouts of volatility because that’s how equity as an asset class functions. If the sole purpose is to invest in funds that are fairly stable, you’ll be better off investing in debt funds. If you are willing to bear periods of instability with the potential to earn good returns, then you should invest in Nifty Low Vol 30 ETF.