ETF/MF under RGESS Arth, 20 Mar 2013

Hi. I'm an eligible investor under the RGESS scheme and planning to take tax benefit thereof in FY 2013-14. In this regard could you recommend some good ETF/ MF schemes which may be worth considering. FYI, whilst I am aware of Fintotal's recommendation of not investing in new MF, I may lose my eligibility to take benefit of this scheme post FY 2013-14 on account of expected salary hikes.

Fintotal Answer

Sure in this situation you can consider investing for RGESS. You'd save up to Rs 25000 on tax. Of all the funds and ETFs avaiable right now Quantum Index Fund is among the oldest diversified funds, best performing and having lowest expense ratio. It is an ETF. You can consider investing in it. Check http://www.knowledge.fintotal.com/RGESS-Eligible-ETFs-and-Mutual-Funds-List/5727 for list

Thanks for your recommendation. Picking up on your determining factors for suggesting quantum index fund, I understand that in selecting an etf, apart from diversification, performance and expense ratio, liquidity (i.e. both buy and sell side) is also a very important. Is my understanding correct? Assuming liquidity is an important determining factor, how liquid is quantum index fund as compared to other larger efts like nifty bees?

arth@hushmail.me, 23 Mar 2013

Yes, from liquidity perspective Nifty Bees is the most liquid RGESS eligible ETF. It is performing well too.

Fintotal Answer,23 Mar 2013


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