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Mutual Funds & ETFs – With Story and Tables

Mutual Funds vs ETFs & SIP vs Lumpsum

📊 Mutual Funds vs ETFs — And SIP vs Lumpsum Explained Simply

🤝 Mutual Funds vs ETFs — Comparison Table

Feature Mutual Fund ETF (Exchange-Traded Fund)
How to Buy Via AMC/Apps (no demat required) On stock exchange (demat + broker needed)
Pricing 1 NAV per day Real-time market price (like stocks)
Expense Ratio Slightly higher Lower (especially for index ETFs)
Minimum Investment As low as ₹100 1 unit price (varies by ETF)
Liquidity Redeemed by AMC Traded in market (depends on volume)
Who Should Invest? Beginners, SIP users Experienced users with demat

📖 The Story of Ravi — A Common Investor

Ravi is a 28-year-old IT professional who wants to invest for his future. He starts with a SIP in a mutual fund, putting ₹5,000/month. After learning more, he opens a demat account and adds an ETF (Nifty 50) to his portfolio for long-term wealth building.

His mutual fund SIP keeps him disciplined, while ETFs give him market-level returns with low cost.

💸 SIP vs Lumpsum Investment — Which is Better?

Factor SIP (Systematic Investment Plan) Lumpsum
Investment Type Monthly/Regular One-time
Risk Lower (rupee-cost averaging) High if market drops after investing
When Useful? Start small, build wealth slowly When you have a large amount & markets are low
Discipline Automatic & consistent Requires timing & confidence
Returns (Long Term) Good and stable Higher if timed well
  • Beginner Tip: Start with SIP. Later add lumpsum during market dips.
  • Ideal Combo: Use both — SIP for routine investing, lumpsum for windfalls like bonus.

🧠 Summary — Quick Takeaways

  • ✅ Mutual Funds are simple and beginner-friendly
  • ✅ ETFs are low-cost but need demat & understanding of markets
  • 💡 SIP = good habit, less risk
  • 💰 Lumpsum = better if markets are low + long horizon
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