Should I invest in Tata Ethical Fund or Reliance ETF Shariah BeES?

I would like to start my new investment in mutual funds via SIP. What is your view on Tata Ethical Fund or Taurus Ethical Fund or Reliance ETF? Which one would be better? I am thinking for long term like five to 10 year investment. Kindly suggest.
--Mohammad Rameez

M.S. Shabbir, founder and managing director, SenSage Financial Services, responds:

You seem to be a faith-based investor looking for long term tax-efficient investments in equity market to beat the inflation. Reliance ETF Shariah BeES is an index fund and is recommended for passive investors. Active schemes like Tata or Taurus Ethical Funds always give a higher return as compared to Index Funds or ETFs.

You will also need to open a Depository and Trading Account for investment in Reliance ETF Shariah BeES. Further, liquidity in ETF may be poor due to trading volumes in Shariah BeES. This is due to lack of awareness within the community.


I recommend you make a beginning with Tata Ethical Fund which is classified as a Multi Cap Scheme with Shariah Board Certification from Taqwa Advisory and Shariah Investment Solutions (TASIS).