Key Takeaways
- • Sharad Kohli, Founder & Chairman of KCC Group, outlines the core factors investors should weigh before selecting an exchange-traded fund, per a Business Today discussion with Sakshi Batra.
- • Kohli argues past performance alone is insufficient; investors should assess the outlook of the underlying sector, market volatility, and the suitability of the benchmark, using index-based products such as BEES as an example.
- • Diversification across sectors and tracking sector rotation are highlighted as key risk-management practices.
- • Frequent trading is discouraged because transaction costs and expense ratios can erode returns.
- • ETFs are characterized as potentially better suited to long-term investment strategies, comparable to mutual funds in that respect.
Summary
Business Today published a discussion in which Sakshi Batra speaks with Sharad Kohli, Founder & Chairman of KCC Group, on how investors should select exchange-traded funds. According to the publication's summary, choosing the right ETF requires more than reviewing historical returns. Investors should instead assess the outlook for the underlying sector, understand the market volatility the fund will be exposed to, and select an appropriate benchmark, particularly when investing in index-based products such as BEES.
Kohli emphasizes the importance of diversifying across sectors and monitoring sector rotation, which can shift leadership between industries over time and affect fund performance. He also cautions against frequent trading, noting that transaction costs and expense ratios can reduce net returns for investors who move in and out of positions.
The discussion positions ETFs as potentially well suited to long-term investment strategies, in a manner similar to mutual funds. The primary source is a general educational discussion and does not report specific fund flows, performance figures, or regulatory developments.
Kohli emphasizes the importance of diversifying across sectors and monitoring sector rotation, which can shift leadership between industries over time and affect fund performance. He also cautions against frequent trading, noting that transaction costs and expense ratios can reduce net returns for investors who move in and out of positions.
The discussion positions ETFs as potentially well suited to long-term investment strategies, in a manner similar to mutual funds. The primary source is a general educational discussion and does not report specific fund flows, performance figures, or regulatory developments.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.