1. Time and research
Picking stocks requires tracking quarterly results, management changes, and valuations. ETFs outsource that work by following an index automatically.
2. Risk management
| Individual Stocks | ETFs | |
|---|---|---|
| Single company blow-up | Portfolio can drop 30%+ | Impact diluted across index |
| Sector rotation | Need to rebalance actively | Index rebalances automatically |
| Costs | Brokerage every trade | One trade, minimal expense ratio |
3. Returns
Only ~10% of active managers beat the index over 10 years (SPIVA India 2023). ETFs match the market, and SmartETF’s dip-buying aims to outperform without extra effort.
SmartETF takeaway
- Use ETFs for base exposure (Nifty, Auto, Bank).
- Enable SmartETF algorithm to buy more units during corrections.
- Review once a month instead of timing trades daily.