मैं अपनी Perfect Portfolio के लिए ये 5 ETFs चुनूँगा (Diversified + Growth) | Rahul Jain Hindi
Choosing the Right ETFs: A Guide to Asset Allocation
Introduction to ETFs and Asset Allocation
- The speaker introduces the concept of selecting five ETFs from over 14,000 available options, inviting viewers to share their choices in the comments.
- The main topic discussed is asset allocation, emphasizing its importance for portfolio returns and volatility management.
- Viewers are encouraged to understand asset allocation thoroughly, as a lack of knowledge can compromise portfolio performance.
Historical Returns of Various Assets
- The speaker presents a comparison of historical returns over the past 15 years for gold, real estate, Indian stock market, US stock market, and debt instruments.
- Notably, gold had significant fluctuations; it was the top performer in 2010 and 2011 but faced losses in subsequent years (2013 -18%, 2014 -2%, 2015 -7%).
- This highlights the necessity of diversification in asset allocation to mitigate risks associated with individual assets.
Importance of Diversification
- The speaker stresses that a diversified portfolio should include various assets like gold, silver, Indian stocks, US stocks, and real estate.
- Rahul Jain identifies himself as a SEBI registered research analyst who has conducted extensive research on this topic.
Recommended ETFs for Investment
First ETF: Mid Cap 150 ETF
- The first recommended ETF is based on India's Mid Cap 150 index due to its strong historical performance compared to other indices.
- Over the last 20 years, this index generated an annualized return of 16.9%, outperforming Nifty50 and others significantly.
Performance Analysis
- Historical data shows that mid-cap indices consistently provided better returns across various time frames (1 year to 20 years).
- Additionally, mid-cap investments have shown lower volatility compared to small-cap investments.
Liquidity Considerations
- Seven high liquidity ETFs tracking the Mid Cap index are mentioned; higher transaction volumes indicate better liquidity which is crucial for investment decisions.
Second ETF: NASDAQ 100 ETF
- The second recommendation is NASDAQ 100 due to its low correlation with Indian markets (23%), providing diversification benefits.
Currency Depreciation Insight
- Investing in NASDAQ can help lock in value against rupee depreciation (average annual depreciation of about 2%-3%).
Gold as an Investment Option
Historical Significance of Gold
- Gold has been recognized as currency since ancient civilizations; it retains value unlike cash which depreciates due to inflation.
Benefits of Gold ETFs
- Gold ETFs are regulated products that eliminate issues related to physical storage and security concerns associated with buying physical gold.
Silver as an Emerging Investment
Demand-Supply Dynamics
- Silver's rising prices are attributed mainly to industrial demand rather than jewelry or utensils.
Future Outlook
- Industrial applications such as EV batteries and solar panels will likely sustain high demand for silver moving forward.
Liquid ETFs: A Safe Parking Lot for Cash
Importance of Liquid ETFs
- Liquid ETFs provide a way to manage cash effectively while earning better returns than traditional bank accounts (6%-8% expected).
Practical Use Case
- They serve as a temporary holding place for funds until investors decide where else they want their money allocated.
Conclusion: Building a Balanced Portfolio
- Five recommended ETFs aim at creating a balanced portfolio. More insights into various types of ETFs will be shared in future videos.