Top 5 ETFs for Long Term Investment in Stock Market

Summary

The video discusses five personal favorite ETFs for long-term investment, aiming to build wealth. The speaker highlights the difficulty of selecting just five ETFs and emphasizes the importance of having an investment horizon of at least five years. They explore small-cap and mid-cap ETFs in India, as well as the FANG ETF from the US, showing how these ETFs have historically performed well. Sector-based ETFs, such as those focused on electric vehicles (EVs), are also mentioned as potential options. The video encourages careful, well-researched investment decisions due to the high-risk nature of these ETFs.

Takeaways

• 📊 There are many ETFs available, but the speaker discusses their personal five favorite ETFs for long-term wealth building.
• 📈 The speaker emphasizes that these ETFs are not traditional ones like Nifty Bees or Bank Bees and are selected for long-term growth, meaning more than 5 years.
• 🧠 It’s important to think carefully and consider personal financial horizons, as these ETFs perform best over a longer period, and short-term results may not reflect long-term potential.
• 🏦 The first ETF discussed is Nifty Bees from Nippon India, but the speaker aims to outperform Nifty returns by selecting other ETFs.
• 🚀 HDFC Small Cap 250 ETF is highlighted for its impressive returns (112%) since April 2023, showcasing strong growth in small-cap companies.
• 📉 Mid-cap and small-cap ETFs have shown nearly 100% returns in the last year, making them highly attractive for investors seeking growth beyond large-cap stocks.
• 🌍 The FANG ETF, consisting of global tech giants like Facebook, Apple, Netflix, Google, and Amazon, has delivered a return of 135% since April 2023.
• 🌱 The speaker highlights sector-specific ETFs, such as those focused on small-cap, mid-cap, and emerging sectors like electric vehicles (EV).
• 🔍 The speaker stresses the importance of researching and selecting ETFs that align with future growth sectors, like IT, FMCG, and EV industries.
• ⚠️ All these ETFs are high-risk and subject to market volatility, so it’s important to invest cautiously and diversify for long-term success.

Q & A

What is the main focus of the video?

The video discusses the creator's top 5 favorite ETFs for long-term investment, emphasizing the potential for wealth creation over time.

What is the suggested minimum investment horizon for these ETFs?

The creator suggests a minimum investment horizon of 5 years for these ETFs to benefit from long-term market trends and compounding.

Why does the creator prefer ETFs over individual stocks?

The creator believes ETFs contain the best-performing stocks, providing diversification and reducing individual stock risk. ETFs have also delivered strong returns historically.

What is the creator's opinion on Nifty Bees and similar ETFs?

The creator acknowledges Nifty Bees as a popular ETF but emphasizes that the focus of the video is on other, more specialized ETFs that have potential to outperform Nifty in the long term.

Why does the creator recommend the HDFC SML250 ETF?

The HDFC SML250 ETF invests in 250 small-cap companies, which historically have shown significant growth potential, with the ETF delivering over 100% returns in a relatively short period.

What is the rationale for including a mid-cap ETF in the portfolio?

Mid-cap companies, though riskier than large caps, offer high growth potential, and the mid-cap ETF mentioned has also delivered strong returns, nearing 100% over the last year.

Which US-focused ETF does the creator recommend and why?

The creator recommends a Fang ETF that includes top US tech companies like Facebook, Apple, Netflix, Google, and Amazon, which are globally dominant and have delivered a 135% return in the recent period.

What is the creator's view on investing in Chinese ETFs?

The creator is cautious about Chinese ETFs due to the underperformance of Chinese companies in recent times but acknowledges the potential for future growth in China's IT sector.

How does the creator suggest using sector-specific ETFs?

The creator suggests that if an investor believes in the growth of specific sectors like auto, FMCG, IT, or EV, they should consider sector-specific ETFs for focused exposure to that industry.

What is the key risk associated with the ETFs discussed in the video?

The ETFs discussed are categorized as high-risk, with potential volatility, especially in the small-cap sector. The creator advises cautious investment and not putting all funds in these ETFs due to the possibility of market corrections.

Outlines

00:00

💼 Selecting Long-term Wealth-building ETFs

The speaker begins by discussing the overwhelming variety of ETFs available and the challenge of selecting the best ones for long-term investment. They clarify that the video is not a recommendation but a discussion of their personal top five ETFs, which are already part of their portfolio. The speaker emphasizes that choosing only five ETFs for long-term wealth building requires deep thought. They stress the importance of a long-term horizon, typically more than five years, and warn that shorter horizons (less than five years) might not yield the best results due to potential market corrections. The speaker encourages viewers to think carefully and use their own judgment, underscoring the personal nature of the ETFs discussed.

05:02

📈 HDFC Small Cap ETF for High Returns

The speaker introduces the HDFC SML250, a small-cap ETF containing 250 small-cap companies. They highlight the strong performance of small-cap stocks, especially in comparison to larger companies like Nifty. The ETF has shown impressive growth, with a return of 112% since April 2023, reflecting the rapid pace of small-cap stocks. The speaker reinforces that small-cap companies often deliver significant returns faster than large-cap companies due to their growth potential. However, they reiterate that this is their personal favorite and not a recommendation, suggesting that viewers consider working with a research analyst for guidance.

10:30

🚀 Mid-cap and Small-cap ETFs: Recent Rally

Moving on to mid-cap ETFs, the speaker discusses how both mid-cap and small-cap ETFs have delivered exceptional returns over the past year, with a 99.5% return for mid-cap ETFs. They explain that the last year has been particularly favorable for these ETFs due to the overall stock market rally, but they caution viewers to examine their portfolios. The speaker emphasizes that ETFs often contain the best-performing stocks, which is why they promote ETFs over individual stock investments or mutual funds. They encourage beginners to consider ETFs as a safer and more effective investment option.

🌍 Diversifying with the US-focused Fang ETF

The speaker introduces an international ETF focusing on top US companies, specifically the Fang ETF, which includes giants like Facebook, Apple, Netflix, Google, and Amazon. This ETF has returned 135% since April 2023, outperforming small and mid-cap ETFs. The speaker explains that investing in these globally dominant companies can be highly profitable, especially since viewers likely use their services. They also discuss how ETFs can be pledged to gain a margin for further trading, and mention a partnership with Algoroom for free trading software. The speaker urges viewers to consider diversifying into international ETFs like Fang for balanced long-term growth.

🔮 Sector-wise ETFs for Strategic Investment

The speaker encourages viewers to consider sector-specific ETFs for future growth, such as ETFs in the auto, FMCG, IT, or EV sectors. They highlight a recently launched EV ETF, which they believe has significant growth potential given the increasing demand for electric vehicles. Though the ETF lacks historical data, it includes companies from both the IT and automotive sectors working on EV development. The speaker stresses the importance of choosing sectors wisely based on future growth predictions and suggests that sector-wise ETFs can be an excellent addition to any portfolio, especially those focused on momentum stocks.

⚠️ High-risk ETFs and Long-term Strategies

The final section focuses on the risks associated with ETFs, particularly small-cap ETFs, which are known for their volatility. The speaker advises caution, as the market is at an all-time high, and suggests investing only a small portion of capital at the moment. They warn that a market correction could occur, making it essential to keep these ETFs for long-term investment. The speaker invites viewers to share their thoughts on other potential ETFs in the comments, reminding them that while these are their personal favorites, the video is not offering direct financial advice. Finally, they urge viewers to subscribe to the channel for more valuable content.

Keywords

💡ETFs

Exchange-Traded Funds (ETFs) are investment funds traded on stock exchanges, much like stocks. In the video, the speaker emphasizes the importance of selecting ETFs for long-term wealth building, specifically recommending five ETFs based on their performance and personal experience. The speaker suggests that ETFs can be better than mutual funds due to their simplicity and accessibility for new investors.

💡Long-term investment

Long-term investment refers to holding assets for an extended period, typically more than five years, to benefit from compounded returns. In the video, the speaker highlights that the recommended ETFs are most suitable for investors with a long-term vision, as they are designed to build wealth over a horizon of more than five years, especially benefiting from market growth and compounding returns.

💡Nifty Bees

Nifty Bees is a popular ETF that tracks the performance of the Nifty 50 index, representing India’s top 50 companies. The speaker mentions Nifty Bees as a benchmark, but emphasizes that they aim to choose ETFs that can outperform it in the long run. This ETF serves as a point of comparison for other, potentially higher-growth ETFs.

💡Small-cap stocks

Small-cap stocks refer to companies with relatively small market capitalizations, often characterized by higher growth potential but also higher risk. The video highlights the HDFC SML250 ETF, which invests in 250 small-cap companies, as a key choice for those seeking long-term gains. The speaker notes that small-cap stocks can double in value more quickly compared to large-cap stocks, making them attractive for investors seeking higher returns.

💡Mid-cap stocks

Mid-cap stocks are companies that fall between small-cap and large-cap in terms of market capitalization. They offer a balance of growth and stability. The video mentions a mid-cap ETF as another good option, with similar strong returns over the past year, though carrying a moderate level of risk compared to small-cap stocks.

💡FAANG stocks

FAANG refers to five major US tech companies: Facebook (Meta), Apple, Amazon, Netflix, and Google (Alphabet). The speaker discusses an ETF that includes these top global companies, emphasizing their strong performance and the fact that these companies dominate not only the US market but also have global influence. The FAANG ETF is highlighted for its 135% return, making it a strong candidate for long-term investors.

💡Pledging ETFs

Pledging ETFs refers to the practice of using ETFs as collateral to obtain a margin for trading. In the video, the speaker explains how investors can pledge their ETF holdings to secure additional funds for trading, providing an extra financial tool for those who want to trade while keeping their investments intact. This practice is emphasized as a strategic advantage for investors.

💡Sector-specific ETFs

Sector-specific ETFs focus on particular industries, such as technology, finance, or energy. In the video, the speaker encourages investors to consider sector-based ETFs if they have confidence in the future growth of a particular sector, such as the auto or EV (electric vehicle) sector. This approach allows for targeted investment based on industry trends and growth potential.

💡High risk, high reward

The phrase 'high risk, high reward' refers to investments that have the potential for significant returns but also come with a greater chance of losses. The speaker frequently reminds viewers that the recommended ETFs, especially small-cap and mid-cap ETFs, carry higher risks due to market volatility, but in the long term, they have the potential to yield substantial gains.

💡Compounding returns

Compounding returns refers to the process where the returns earned on an investment are reinvested to generate additional returns over time. The speaker stresses the importance of compounding in long-term investments, particularly for ETFs, where staying invested for many years can lead to exponential growth in wealth, especially over a 10-20 year horizon.

Highlights

The speaker emphasizes that these ETFs are their personal favorites and not recommendations, advising viewers to use their own judgment or consult a research analyst.

If someone has a long-term investment horizon of over 5 years, these ETFs are suggested as potential wealth builders.

The speaker points out the compounding effect over 20 years and how it can significantly enhance ETF returns compared to shorter investment periods.

The HDFC SML250 ETF is highlighted for its impressive performance, with a 112% return from 2023 to 2024, focusing on 250 small-cap companies.

The speaker explains that ETFs contain the best-performing stocks, making them preferable to mutual funds for new investors.

A mid-cap ETF is discussed, which gave a 99.5% return from 2023, showcasing the potential of mid-cap companies in the current market.

FANG ETF is featured for its 135% return in 2023-2024, with top global tech companies like Facebook, Apple, Netflix, Google, and Amazon.

The speaker suggests considering international exposure, specifically mentioning the FANG ETF for those interested in leading tech stocks globally.

Small-cap companies are highlighted as potential multi-baggers, capable of growing faster than large-cap companies, thus making small-cap ETFs attractive.

The importance of long-term investment in ETFs, where compounding over extended periods can significantly outperform short-term gains.

The speaker discusses sector-specific ETFs, mentioning options like Auto, FMCG, IT, and EV ETFs, depending on one’s belief in a sector's future growth.

An EV sector ETF is mentioned as a newly launched option with potential for growth as the electric vehicle industry expands.

Momentum 30 ETF, already in the speaker's portfolio, is noted for its ability to capture stocks with strong upward trends, boasting significant returns.

The speaker advises cautious investment due to the current high market levels and potential volatility, recommending diversification.

The speaker encourages viewers to research ETFs and sectors they believe in, rather than relying solely on market momentum.

Transcripts

Well there are so many ETFs, which ETFs should we invest in.

If someone has a long term vision then which 5 ETFs can

make you a good wealth.

Well there are so many ETFs but in this video there is no

recommendation but I am going to talk about my personal 5

favorite ETFs.

If I would have made a new portfolio then which 5 ETFs

would have been in my portfolio although they are already

in my portfolio.

So I already have more than 5 ETFs but if

I have to choose only 5 ETFs then this choice is very

difficult and we will take this decision after a lot of

thinking that which ETFs can work for us in long term like

a wealth builder.

Now these are not normal ETFs, we are not going to talk

about Nifty Bees, Bank Bees or other ETFs.

If we want to make a wealth in long term, now long term can

be different for different people it can be 3-5 years for

some people, 10 years for some people, 20 years for some

people.

So these horizons are very different. We can't compare 3

years and 20 years.

In 20 years, the compounding of these ETFs will go to the

next level, I will show you that and will explain it to you.

Now for 3 years, I will consider a short term duration only.

So if your horizon is more than 5 years then only you

should consider these 5 ETFs otherwise if your horizon is

less than 5 years means you need money before 5 years then

there might be a correction in the market in which these

ETFs don't work that well

but in long term, history says that these ETFs have made

good money.

So understand this video, there is no recommendation, use

your brain. These are my personal favorites and I like them.

So it is possible that you might have understood something

or not. So watch this video till the end, you will learn a

lot.

Let's start. Now we have a simply, Nifty ETF is open.

Nifty's ETF is Nifty Bees.

So this is Nippon India's ETF. Here this ETF is running at

the price of 278.

Do we have to buy this ETF? I said if I have to choose only

5 ETFs for long term, then I have to beat this Nifty.

I have to beat the returns of this Nifty. So now watch

carefully which ETFs I am going to talk about.

Now if you are bullish in India. If you are bullish in

India then you have two options.

I want to tell you that there is a company which is not

more than 1000 crores.

You can say it is a 100 crores company. I won't say

anything big. 100 crores company is a very small company.

For a 100 crores company to be worth 200 crores, you might

think that it will take a lot of time.

But if you invest in Lines, which is a company worth more

than 20 lakh crores.

So you yourself think in your mind that a 100 crores

company will be worth 200 crores soon.

Or a company worth 20 lakh crores will be worth 40 lakh

crores soon.

A big man will take time to become double. A man who is

running a small business, his business can double soon.

So small business companies, there is no company worth 100

crores.

But if we talk about the small cap sector, small cap

stocks, then the chances of double being 10 times are more.

So those who look for multi-bagger stocks, all those stocks

come out of small cap.

So why don't we look at 250 top small cap stocks.

There is a simple ETF, HDFC SML250.

This is a small cap ETF of HDFC.

It has 250 small cap companies.

If I show here, then this ETF has already given very good

returns.

And in comparison to Nifty, you can see that it is simply

running.

So if we track this ETF here, then you can see that this

ETF has taken a simple trajectory and it is going up very

fast.

Now because it is going up very fast, historically you are

seeing this.

But historically you will not be able to see this in

comparison to Nifty Bees.

Because the data you have is only up to 2023.

So from 2023, if I mark its low to high, I have put a line

chart here, I will do it again.

So if we look at the low to high from the line chart, then

it has given a return of 112%.

We have been seeing this since April 2023.

So today we are sitting in 2024.

Not much time has passed, in about 1-1.5 years, it has

given 100% returns.

We are talking about HDFC small cap.

Again, there is no recommendation.

These are my personal favorite ETFs.

If you like them, you can consider them, you can study them.

If you don't like them, then don't do it at all.

And you can also work under a research analyst with

guidance.

So here we have seen a small cap ETF.

Next, if you want to reduce the risk a little, although

there is a risk in the mid-cap too.

But if you talk about a mid-cap ETF, a simple mid-cap ETF,

then you will see a similar rally in this ETF too.

See this.

So now we have data available from before 2023.

So if we take it from 2023, let's mark it low to high.

So if you look at low to high, it has given a return of

99.5%.

So mid-cap and small cap have given a great rally in the

last year.

If you are a year old, then this is a very short time.

In a year, any stock has run.

Generally, if someone has invested in the stock market,

then he must have made a return in the last year.

But still I have a question.

You must have some stock.

There must be a portfolio of those stocks.

You check your portfolio.

Did you get a 100% return in the last year?

You will say no.

Not everyone got a 100% return.

How are they giving so much return from ETFs?

Because ETFs have the best stocks.

So the actual good stocks are those stocks in your

portfolio.

If your investment was in ETFs.

That's why I recommend ETFs a lot.

I also promote a lot that if you are new, then you can

consider ETFs.

In fact, I think ETFs are better than mutual funds.

Let's move on.

So we talked about mid-cap and small cap.

Let's go a little out of India.

We talk about Fang.

If I had made my portfolio, then I would have had this ETF.

Now if we look at the return of this ETF, then we will see

again from 2023.

If we were talking about April 2023, then this will be a

little longer.

But I have the low, I will take it from here.

Or let's take it from here.

Let's do it from here.

In this duration, this ETF has a return of 135%.

Better than your small cap and mid-cap.

US stocks are more.

Now which stocks come in May Fang?

Top stocks come not from the US but from the world.

Facebook, Apple, Netflix, Google, Amazon, you will buy all

of these.

And you already use all these services.

So why don't we consider it?

Simple, I have shown you a simple example.

This ETF is already in my portfolio.

It is already giving returns.

What I am telling you now is not that I am just saying.

It is in my own portfolio.

Now if I am talking about Fang, here is Fang.

And in Fang, my quantity is already 21,517.

Now this is an example.

Now the ETFs you are buying, we told you that you can also

pledge these ETFs.

So here I have pledged in some quantity.

By pledging, you get a margin.

And through this margin, you can also trade.

Now every broker does not allow you to do this.

So if you want to invest in ETF, trade in the stock market,

and also pledge.

So for that you will need a Demat account.

You will get the links of free Demat accounts in the

description and pinned comment.

In fact, if you want to get money after pledging and you

want to trade.

So we have tied up Algoroom with Algoroom.

And there is also a giveaway, through which you can get

Algoroom software free of cost.

So save the number on the screen.

On this number, you will get the steps to sell high.

That how you will get Algoroom software free of cost.

So what you can do with that, you can also trade.

So if you want, it is best for investment if we are

investing in ETF.

Now let's continue.

Let's go to our next ETF.

Now I have told you three ETFs.

Now the big choice becomes more complicated.

When we talk, I am thinking for long term.

And I want to buy only 5 ETFs.

So what other ETFs will be there.

If we talk about super powers in the world.

So we bought the US, we bought the best companies of the US.

India is an emerging power.

In India, we are investing in small cap and mid cap.

If we talk about China.

China is controlling Africa.

It has given a loan to Africa.

In fact, it has given a loan to Nepal.

China has taken care of Pakistan.

And China is still number one in manufacturing.

We have to understand this.

So the Chinese companies are underperforming.

So I will not talk about Hang Seng.

I think China's IT can also give performance in the future.

Although I will not talk about sentimental values here.

the data we have now, it is around 19-20 rupees, so if I

take a 20 rupees rate from here, then you see how much

percent return can be there, it can be around 44 percent

return, so we also have to see that the things that have

increased today, we should

not only buy them, we can buy something cheaper, see my

point of view, I want you to invest by yourself, then do it

with a clear mind or you do it under the guidance of a

research analyst, if I was making a portfolio, then I like

it a lot, I am talking

about ETF specific, we are not investing on any one

company, so if it goes as far as it can go, then it can

give a good return, it will not give, they say that

investment in the stock market is subject to market risk,

so do it very carefully, again let's

move forward, one more ETF, now there are a lot of ETFs, if

I leave a choice here for you, what do you think which

sector will grow very well in India, we can also choose a

sector wise ETF, for example, if you think that the auto

sector will go, then

you have the option of auto, if you think that FMCG has not

worked for a long time, then you have the ETF of FMCG, you

do not think, you think that if IT can perform, then you

have the option of IT ETF, for example, you think that

EV can run very well, so if I write EV India, then again an

ETF comes in it, which is running at the rate of 33.71

rupees today, and this is a newly launched ETF, so we do

not have very old data, but in this ETF, there are those

companies which are working

in the EV sector, there are some IT companies, there are

car companies, so if you think that in the future the

demand for EV will increase a lot and EV can become a very

big sector, then you can choose this ETF if you want, so I

will tell you that whichever

sector you like, you should have a sector wise ETF, so if

you have a sector wise ETF, then it is always good,

otherwise if I made my portfolio, then what I would have

done, I would have told you that it should be sector wise,

I would have bought such

stocks that have momentum, so I would have bought a sector

wise ETF, and the stocks which have momentum, they run

well, so if we compare that, we were seeing since 2023, so

if we see low to high, so in this duration, there is a

return of more than 100%,

so these are the companies which have momentum, so I have a

momentum 30, which is also there, if I go to my portfolio,

then you will also see momentum 30, so this is the momentum

30 ETF, I already have 72000 quantity, so these are the

ETFs which are in

my portfolio, if I make a new portfolio of ETFs, then I

will consider these 5 ETFs, now friends, there is a

disclaimer which is very important for you to understand,

point number 1, all these ETFs are in the category of high

risk, high risk means that

there can be more volatility in it, it is dependent on the

market, in small cap, you see that if the market goes up

very fast, then small cap runs, but if the market falls,

then small cap also falls, so it is high risk and the

market is also running at

its all time high, so here you should invest a little

carefully, you put a little money, there is no problem, but

don't invest all your money now, it is possible that the

market corrects in between, when it corrects, then you can

consider these ETFs,

keep them in your portfolio, and you will get good returns

in the long term, now what do you think, do comment and

give your opinion, if you think any other ETF is also good,

then write its name in the comment, it is possible that

many people will get

to know about some new ETFs through you, people go and do

research, how did you like this video, do tell in the

comment and share it, so that this valuable video reaches

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and Jai Hind.