1. For a long-term investor, an open-ended Index Fund will fare better than ETF as there is :-
a) No need of demat and broking accounts.
b) No need to wait for a market buyer/seller.
c) No worry of market illiquidity.
d) No worry of premium buy/discount sale.
e) Lesser brokerage/demat charges.
2. In long run, these several benefits will outweigh its higher tracking error and TER, and prevent any trading mentality too.
3. ETFs with high liquidity are ok for existing demat / brokerage account holders.
4. For MF investors, with no intention to venture into stock investment and trading, Index funds will suffice within their MF folio, without opening and maintaining these accounts too.
5. A tip - a Minor can be made a joint holder of a MF folio holding Index funds, besides other MFs, unlike a demat account holding ETFs and equity shares.
a) No need of demat and broking accounts.
b) No need to wait for a market buyer/seller.
c) No worry of market illiquidity.
d) No worry of premium buy/discount sale.
e) Lesser brokerage/demat charges.
2. In long run, these several benefits will outweigh its higher tracking error and TER, and prevent any trading mentality too.
3. ETFs with high liquidity are ok for existing demat / brokerage account holders.
4. For MF investors, with no intention to venture into stock investment and trading, Index funds will suffice within their MF folio, without opening and maintaining these accounts too.
5. A tip - a Minor can be made a joint holder of a MF folio holding Index funds, besides other MFs, unlike a demat account holding ETFs and equity shares.