I want to sent my son for masters studies in CS (cybersecurity or AI or Cloud) to Germany,he completed his Engineering in CS, with CGP6.8. Please suggest the best university for the said course and placement assurance. It will be also appreciated if could name few agency who can help to support for documentation to get VISA & Admission.

Ans: I appreciate your thoughtful comparison of ETFs versus mutual funds. You are asking a very practical question and it shows good financial awareness. Let’s look at this carefully so you get clarity without confusion.

» What ETFs and index-linked products really do
– ETFs that track midcap and smallcap indices simply mirror the performance of those market benchmarks.
– There is no active management or stock picking to protect you during weak markets.
– When indices fall sharply, ETFs will fall by almost the same percentage. There is no defensive action.
– Index-linked products may seem low maintenance, but they do not adapt to market changes.

» Why actively managed midcap and smallcap mutual funds are different
– Actively managed funds have professional managers who choose stocks based on research, valuation and risk.
– They can adjust exposure to sectors and companies depending on market conditions.
– This means that in volatile phases, they can protect capital better than index trackers.
– Over long periods, learning to stay invested in well-managed funds often leads to better risk-adjusted outcomes.

» The challenge of “top performing” funds changing over time
– It is true that past performance ranking changes every year. No mutual fund stays number one forever.
– This is why selection should be based on long-term consistency, process, risk management and quality of management. Returns alone should not be the only criterion.
– A Certified Financial Planner helps you choose funds with good fundamentals, not just recent high returns.

» About monitoring and switching funds
– Frequent switching based only on short term performance is not a strong investment habit.
– Every switch can trigger capital gains tax for equity funds if sold within one year at higher short term tax rate, or after one year you still need to consider LTCG above Rs 1.25 lakh at 12.5%.
– Good investing means giving time for your chosen strategy to work unless there is a clear reason to change.

» Why ETFs are not always better for long-term goals
– Just because ETFs avoid switching does not mean they give better returns after tax. They still rise and fall strictly with the index.
– In falling markets, index trackers cannot reduce risk, but actively managed funds can.
– Even though ETFs may look simple, they can lead to larger drawdowns when markets are weak since they cannot adapt.
– In the long term, protecting capital during weak phases is as important as chasing returns.

» When actively managed funds make sense in midcap and smallcap space
– If you have a long-term horizon (10 years or more), actively managed funds can add value through stock research and risk calibration.
– They aim for better risk-adjusted returns over full market cycles, not just bull phases.
– With a CFP’s guidance, you can build a diversified portfolio that balances midcap, smallcap and broader equity exposure without frequent tax-triggering switches.

» Practical investor behaviour perspective
– ETFs can make investing easy, but easy does not always mean better outcomes.
– Investors often buy ETFs and then fail to rebalance or adjust when markets change.
– With actively managed funds, the fund manager’s decisions complement your long term holding discipline and take some burden off you.

» Final Insights
– Avoid choosing investments just by how they are labelled (ETF or mutual fund). Look at what they actually do in markets.
– For midcap and smallcap exposure over 10 years, actively managed funds tend to offer better alignment with long-term goals and risk control than index ETFs.
– The idea that ETFs avoid switching costs is true, but it is not a strong enough reason to ignore the flexibility and risk management that active funds provide.
– Tax impact matters, and with wise planning you can manage gains efficiently without frequent switches.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment