equity diversified mutual funds, index funds, equity ETFs or ULIPs – what is the best investment option for long term wealth creation ?

POSTED BY monGenie ON November 27, 2010 5:09 pm COMMENTS (7)

hi there,

I am a novice in the field of personal finance… currently studying each one these…

thought, best way is to brainstorm, this exercise will help all of us bring up any point left to consider…

‘long term’ here means 30 yrs odd…

I request you’ll to please mention which is your choice and why ?







7 replies on this article “equity diversified mutual funds, index funds, equity ETFs or ULIPs – what is the best investment option for long term wealth creation ?”

  1. Ramesh Mangal says:


    Thanks for the compliments.
    I am always ready to learn / help. Please go ahead about whatever query you may have. Starting from zero, I try to upgrade my knowledge with whatever avenues are at my disposal.

    Regarding the ULIP thing, I tried looking at them but never was able to decipher them completely. Maybe I did not give much more time to it. I have a notion / belief about the non-transparency and high charges about ULIPs which is yet to be proved wrong in my eyes. And you know that, once there is a belief, it is difficult to counter it. Maybe you can help. 🙂
    In investments, there is one thing that I know definitely – always question the why and how of each and everything? being cynical helps!


  2. shashank kashettiwar says:

    The factors you have mentioned are of utmost importance. I too would keep that in mind while attempting the financial planning of an individual. These are’ obvious factors’ which everybody should look into. There are some ‘non obvious’ factors also which are required to be considered.( I may be able to write more on it if someone takes up my offer of getting their financial planning done as a live case on the forum. I had even offered it to Pradeep Gaikwad -who had sought advice on the forum- but he never came back on the issue.). I can definitely say that from the financial planning point of view inclusion of ULIPs or traditional savings plans of insurance improves the complete portfolio of a person on all the fronts you have mentioned.
    And Ramesh don’t tell me you haven’t been able to completely understand the ULIPs and think that they are not transarent! Man, a person like you who understands MFs and stocks investments so well, in minuties, to the very core; can master other investment avenues also. I think somehow you didn’t devote the required time for it. May be you never had motivation to do so. Because I come from insurance background I had proper set of incentives to study it more thouroughly and understand the macro-micro aspects in details.
    Well, this forum gives all of us a chance to learn from each other and thanks Manish for that!
    Presently I’m working on a client’s portfolio of MFs and stocks as a part of his financial planning. I have prepared the solution/strategy about what to do with it because I know the complete ‘scenario’ of him from the financial planning point of view. Would you like to attempt to reorganise this portfolio? (Without revealing much specifics I can give you some general info about him if at all you require that.) I hope to learn from you.


    1. sada says:


      I am ready to give my case for financial planning on the forum, will u be interestedtto assist us?


      1. shashank kashettiwar says:

        Yes, I’m ready to assist. I have a process and I will be taking you through it. Kindly read my comments under the topic ‘Seek Guidance for Financial Planning’ .This was submitted by Pradeep Gaikwad on the forum.
        In the comments I have written briefly how the process starts. I have also asked some basic details. Do provide those. The detailed data would be asked by the process as & when required.
        Read the comments and give your feedback. If you can’t find that question, then I would copy-paste the matter here.


  3. Ramesh Mangal says:


    i wanted to imply, ULIPs are good for most of the investors who are “non-disciplined” without any doubt.
    But for disciplined investors, I would say there are multiple pathways. Transparency and liquidity is what is required, which unfortunately I have not been able to find in ULIPs (past and present). maybe you have found it, so you can try and use them. Not me. 😉
    I have always found the “normal” MF a better tool, as far as I know, in terms of flexibility, front-loading, expenses and liquidity. 🙂

  4. Ramesh Mangal says:

    For absolute/relative novices and defensive investors, ideally a broad-based index fund (not ETF preferably, as they incur costs in the form of brokerages and annual demat charges) which charges less that 0.30% FMC per annum. Unfortuately, there is no fund matching these criteria.
    So, for the near future, diversified equity funds are the best way forward. Look for good 3-5 year performing funds with low FMC and preferably low turnovers. Go for growth option of the schemes. Diversify across market caps and across the AMCs.
    Have a disciplined approach in investing. You can invest monthly, quarterly or frequent lumpsums.
    Considering the no-clarity over ULIPs in DTC, avoid getting into a new ULIP. Otherwise, it is also a good tool for “mostly” non-disciplined investors.

    1. shashank kashettiwar says:

      Come on Ramesh, the ULIPs are good for the disciplined variety also huh!!!!!The disciplined investors can use them in even better way than the others!!!!


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