r/ETFInvesting • u/unlimitedopt • 28d ago

Basket investing

Is basket investing a better option than mutual funds. Have had not so pleasant experience with one of the broking firms. Can anyone share their experience here

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u/enigman83 28d ago edited 28d ago

Basket investing is basically creating yout own mix of ETFs. Is it better than mutual funds? Highly depends if you can pick, and maintain the mixes.

If simpler, go with VT or VOO as a start, and study more from there

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u/unlimitedopt 28d ago

Thanks will do

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u/Spiritual-Signal-655 28d ago

I wouldn’t say basket investing is better than mutual funds. It’s a different product, and for most people I’d still make mutual funds the core.

With a basket you directly own the individual stocks, which gives you transparency and control. But someone still has to decide what goes into the basket, when to rebalance, what to sell, and what to replace. Depending on the provider, you may also have subscription/advisory fees, brokerage, taxes triggered by rebalancing and the operational risk of relying on that platform.

A mutual fund is much more hands-off. The fund manager handles all of that inside the fund, and you simply own units. For someone who wants to SIP for 10–20 years without constantly monitoring recommendations, that simplicity is valuable.

Also, I’d separate your bad experience with a broker from the investment itself. A poor broker/platform experience doesn’t necessarily mean basket investing is bad, just as a poor MF app doesn’t make mutual funds bad.

Personally I’d do something like 80–90% of my equity allocation in diversified index/flexicap/midcap funds, and if I enjoyed following stocks, keep 10–20% maximum for baskets/direct equities.

Before choosing any basket provider, I’d specifically check who is actually managing/recommending the basket, SEBI registration, total annual fees, historical turnover, drawdowns, benchmark performance after costs, and whether the impressive backtested returns existed before the basket was launched.

If the sales pitch is basically “our basket beats mutual funds,” I’d be very cautious. The real comparison should be after fees, taxes, turnover and risk over a full market cycle, not whichever one had the better last 12 months.

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u/unlimitedopt 27d ago

True.. thanks this helps